This time we are putting LV’s head of equity release Vanessa Owen on the spot with the following question:
Q: Will the Equity Release Council be able to help turn equity release into more of a mainstream product, or is it just another tootthless trade body?
A: After more than two decades in existence, the equity release trade body SHIP recently relaunched as the Equity Release Council, changing from a provider focussed trade body to representing all aspects of the Equity Release industry.
So what?
The industry has survived the debacles of the 1980’s largely because SHIP stepped in to deliver what is to all intents and purposes product regulation.
It gave consumers wanting to release equity safeguards without which the industry may not have survived. This is why LV= joined SHIP back in 2008 when we first launched into the equity release market.
Much has been achieved with both the Government and commentators at least being privately supportive of the role equity release must play in supplementing retirement income.
However, there is still a long way to go. The products are still viewed by the regulator as high risk; there are a limited number of funders taking advantage of the long term attractive returns offered by the assets; and only a small minority of advisers and brokers actively advise on equity release.
We know there is potential demand from consumers for equity release. For instance, our recent ‘State of Retirement’ report revealed that 6.25 million Britons aged over-50 look set to retire on less than you would earn from the UK minimum wage.
Today, around 1.2 million people live solely on the state pension and as we can see from these figures, it is a trend on the rise.
The basic state pension averages at £9,672 a year when you take into account additional benefit income, in comparison someone working full time on the minimum wage would earn £11,477 a year. For many equity release will provide an essential financial lifeline in retirement.
By joining the Equity Release Council advisers will be able to help influence how we move forward as an industry.
There is a lot to do, involving regulators, policymakers and the Government, so your input will be invaluable in helping to ensure the Council focuses on those areas key to advisers and clients.
So if you are an adviser active in the equity release market, or it is on your radar for the future, join up and add your voice to what the future of the equity release market should look like.
Submit your question to ask our panel of experts by tweeting us @mortgagesols or email questions to theexperts@incisivemedia.com.
