Equity release to become mainstream product as pensions fail to cover cost of living
Equity release is expected to see a significant future growth as more and more pensioners are unable to cover the rising cost of living.
With pension provisions insufficient and savings affected by low interest rates, many retirees have already been forced to return to part time work.
While there are other driving forces behind pensioners returning to employment, pension shortfall remains the main reason for an increased interest in equity release according to many advisers.
“Equity release is not just for home improvements or single item purchases,” says Richard Espley, Head of Equity Release at Goldsmith Williams. “It is now increasingly needed to help cover the cost of everyday living.”
Yet despite the industry seeing an increase in popularity, and experts predicting equity release will soon be considered mainstream, Mr Espley is a little apprehensive:
“With the property and mortgage markets remaining stagnant, it is only natural that advisors will look to alternative products such as equity release in order to supplement their own income.
“However equity release remains a niche product, one that has significant financial and legal implications for the client. It is essential that non specialist advisors utilise the specialist financial and legal advisors with experience of equity release. Clients deserve a comprehensive assessment of their circumstances to determine the suitability of equity release as well as a thorough presentation of the nature, effects and implications of their decision to proceed with their chosen plan.”
Content correct at time of publication