Calls for innovation in Equity Release industry
The equity release market is in need of innovation if it is to become a mainstream product and thrive in the coming years, according to a report by the Financial Times.
The news provider believes an influx of new suppliers is essential to increase competition and provide customers with a good variety of equity release options.
It went on to commend the introduction of drawdown facilities, citing it as a “revelation” and “one of the best things to have happened to the sector over the course of the last few years”.
Drawdown allows homeowners to release equity from their property in smaller amounts and over a period of time working in a similar way to a salary income instead of receiving the amount in a lump sum. The newspaper pointed out such a facility means those who take out a drawdown equity release plan avoid having their interest payments roll up over the years and increase debts.
Understandably, with retirees looking to subsidise flailing pensions and dwindling savings, drawdown equity release plans remains the most popular option, experiencing an 11 per cent increase in Q1 2012. It now accounts for 66 per cent of all equity release sales.
Content correct at time of publication