Equity release scheme sales are on the up, according to the latest figures from Safe Home Income Plans (Ship), the industry’s self-governing body. All eight members of the organisation reported a significant increase in sales over 1999.
Commenting on the announcement, Ship chairman Mark Goodale, said: “The total value of new business carried out by our members last year was £240.1m. This represents a huge increase of 143% in the past two years and points to a growing confidence in the effectiveness of these schemes to unlock much needed extra finance for elderly home owners.”
Ship member sold a total of 5,131 new schemes over 1999.
Market newcomers Norwich Union said that it had seen a considerable increase in sales, despite only entering the market in November 1998 and joining Ship the following April.
Daren Carter, head of marketing equity release at Norwich Union, said: “We have seen business improve quite dramatically over the last year.”
He said one of the key reasons for the market’s success was moves to increase consumers’ confidence in equity release. “The work Ship has done on protection in the market has acted as a level of reassurance for consumers,” he said.
Following controversy over how equity release schemes were sold in the 80s when negative equity left many elderly people unable to repay their loans, GE Life said the product is now being seen in a new light.
Brian Tarrant, life actuary at GE Life, said: “We have experienced enormous growth and we feel this is largely due to the growing acceptability of equity release as a product choice to retired people, their families and their financial advisers.”
Carter added that the entrance of new players with recognised and trusted brand names had also gone a long way in boosting the profile of equity release.
He said: “The entrance of new and bigger players with more up-to-date products that are better suited to customers’ needs has helped. More and more people are now seeing equity release as a product they can take advantage of.”