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Imagine a world without equity release – Rozario

by: Andrea Rozario, chief corporate officer at Bower Retirement
  • 23/03/2018
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Imagine a world without equity release – Rozario
The equity release market continued its revival throughout 2017, once again smashing annual lending records and I agree with the market confidence that by 2020 a £5bn target is perfectly achievable.


However, regardless of our success, I still only see marginal gains in the national media coverage of our industry.

Even with new well-known lenders joining the market, flexibility and options prevailing throughout products, and record numbers of customers completing, equity release is still too often written off as an ‘expensive last resort’.

The wider coverage of our market continues to compare apples with oranges as if the lifetime mortgage and residential mortgages were one and the same, something we all know to be false.


Imagine no choice

But what if there was no equity release? Would the national coverage of retirement lending be different?

I would suggest that if there were no lifetime mortgages the financial and emotional status of older homeowners would be far worse, and perhaps the media would be calling for products just like equity release.

Imagine, if you will, the stress and heartache that would be heaped upon retirees if they discovered that the only way they could make ends meet toward the end of their lives was to sell-up and downsize.

Not everyone can remortgage in later life, and the MMR has made securing a mortgage that runs into your 80s even harder.

So, in this hypothetical world where the lifetime mortgage does not exist, what are older homeowners to do?


Downsizing difficulties

The vast majority of people do not wish to downsize and this is unlikely to change.

First, the obvious reasons of comfort and familiarity play a major role, but how many grandparents also serve as a day-care centre for young relatives?

What with a tragic loneliness epidemic spreading through the elderly population, forcing people to downsize will have major repercussions for individuals and the wider society.

However, even if grandpa and grandma would consider downsizing, where would they go?

The severe lack of suitable housing for elderly people in this country means that more and more want to stay put, and let’s not even mention things like stamp duty and the general cost of moving.

So, without options like the lifetime mortgage many people could essentially be forced out of their home.


Choice and respect

What this ultimately comes down to is choice and respect.

Elderly homeowners have put more into this country through both work and taxation than any other group to date – so they deserve options.

The landscape of retirement has changed, and today’s retirees need to find a way to pay for a retirement that will last far longer than their own parents and grandparents.

Without equity release, we would strip people of the chance to have the retirement they deserve.

Downsizing is still a great option for some retirees, and I wish it was cheaper and simpler, but I for one am glad that people have the choice they deserve to live out their days where they want to.

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