We’re now seeing new products that are allowing more flexible drawdown methods, with some lenders even offering monthly drawdowns.
We’ve seen heavyweight high street names enter the fray and mix things up too. But what’s next?
Well, for a market that has been traditionally the domain of the older homeowner, the shift could be towards a younger equity release customer.
In an Ernst & Young survey, many of the equity release industry’s biggest players were asked how they foresaw the industry changing and our customer demographic shifting in the next year: growth in younger customers was the second most popular change.
Currently the average lifetime mortgage holder is apparently over 70, but this could well be changing. But why?
Appealing to youngsters
The obvious reason is that our customer base is growing.
As record numbers of people access their equity via lifetime mortgages, it stands to reason that we will see a higher number of younger customers accessing our products.
But there’s less obvious reasons equity release is appealing to a younger crop of customers.
Firstly, equity release has evolved drastically in the past few years.
The basic lump sum product has gone from dominating the industry and we now have a range of innovative products in today’s market.
Equity release is increasingly focusing on choice and flexibility, which lends itself perfectly to younger customers who need wiggle room.
Changing retirement and retirees
Next, rising life expectancy, coupled with typically low pension savings, has changed the entire landscape.
Most people cannot rely solely on a pension any more, and options like equity release are certain to become a more important consideration, because pensions and savings simply will not stretch far enough.
Finally, just as our industry has changed, as has today’s retiree.
Those entering retirement today are, in general, far more liberal than their parents.
Baby Boomers were at the heart of the cultural revolution in the 1960s and their liberalism flows further than their politics and free-thinking, and into their wallets.
Essentially, today’s retirees are more willing to experiment with things like equity release and the future of our market will be shaped by the Baby Boomers.
Younger products essential
Overall, a shift to a younger customer is almost guaranteed within equity release.
What we need to do is be prepared for this.
New flexible products designed specifically for those closer to the 55-year-old threshold are essential.
But if we are prepared and can cater for evolving needs, a younger population of customers could really drive equity release forward.