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We need research that helps consumer understanding of equity release – Rozario

by: Andrea Rozario, chief corporate officer, Bower Retirement
  • 29/05/2018
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We need research that helps consumer understanding of equity release – Rozario
The equity release market is on a roll. In the first quarter of this year more than £800m has been released by homeowners up and down the country through the myriad products now available.

 

 

In a few short years, the market has quadrupled in size, and the future looks even brighter.

However, before we get ahead of ourselves, there are still a few negatives swirling around that need addressing.

First, despite the success we have been having in terms of lending figures and product development, it is easy to get caught in an echo chamber.

Yes, we should be proud of the steps we have made, but we need to remember we are still not quite mainstream.

 

Myths and confusion

The primary barrier in the way of mainstream success is the persistence of myths and confusing information.

How can the general population be expected to understand the nuances of equity release if all they read is conflicting and confusing reports?

The recent news that claimed 76% of interest-only customers will not be able to access equity release, is a classic example of unhelpful analysis.

For starters, this figure has been conflated with data on repayment loans, which are a completely different animal to equity release. Plus, the claim, which was made on a recent podcast, is only relevant to the 45 – 65 age band, which again is completely unhelpful as equity release is only available to those aged 55+ and the average customer is now over 70.

Headlines that cherry pick data are par for the course, but the reality is often much more complex.

 

Hurting the public

Although I am certain the data and research is sound, the implementation of this analysis is hurting not only the equity release industry, but the broader public who will become increasingly confused.

Of course, I know that the lifetime mortgage will not work for everyone, but we do need comparisons and research that help, rather than hinder, people’s understanding of our products and their options.

After all, as the record numbers of customers prove, more people will now be considering equity release than ever before, and we need to be educating them in the clearest way possible. Otherwise, we all lose.

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