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Unlimited potential for further growth in equity release – Equilaw

by: Claire Barker, managing director, Equilaw
  • 02/01/2019
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Unlimited potential for further growth in equity release – Equilaw
In March 2016, the insurance giant Legal and General issued a report predicting that the equity release market would achieve sales of £2.3bn by 2019, with the potential for long-term growth deemed to be particularly strong.

 

Barely three years later, the industry stands upon a threshold of £4bn worth of sales in a single year.

The figure is almost double the amount predicted by the report and 12 months earlier than expected – a remarkable accomplishment.

Yet as we prepare to embark upon a new year, the potential for further growth seems almost unlimited.

Almost 20%, or one in five, property owners saying that they would consider using equity release to unlock the wealth tied up in their homes, according to a survey conducted by L&G earlier this year.

The number of people aged 65 and over is projected to grow to a quarter of the national population by 2024, according to the Office for National Statistics.

Moreover, 69% of the UK’s housing equity thought to be owned by people aged 55 or over and the total value of property owned by people aged 65 or over estimated at over £1.1trn.

 

Need to access wealth growing

It seems safe to say that the number of potential equity release customers and the wealth that they can access is expanding rapidly, while the need to access that wealth is also growing.

Indeed, research conducted by True Potential Investor found that people aged between 55 and 64 are currently facing retirement income deficits of around 30%.

All of which means that, as the range of traditional post-retirement finance options, such as savings, and pension schemes, continue to fall by the wayside or to pay out ever diminishing amounts, the appeal of alternative choices can only increase.

Once we factor in the rocket-like growth of equity release products over the past two years, the steadily decreasing interest rates and the fully regulated guarantees that come as standard, the role of equity release as a legitimate, and widely acknowledged, source of retirement finance is assured.

It means equity release is destined to soar over the coming 12 months and to continue doing so for many years time to come.

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