But despite optimism following the release of the Q3 figures, which demonstrated significant quarter-on-quarter gains, the market uptick came off the back of a very low bar in Q2. The final-year results provided a more measured picture of true market conditions.
On average, market totals have regressed to 2017 levels, with 57 per cent of activity concentrated into quarters one and four, demonstrating the effect the pandemic had on customer confidence and a willingness to commit to major financial decisions.
Even among those stronger periods activity fell markedly, with Q4 proving to be the quietest year end since 2017 and a 10 per cent year-on-year drop in the number of new plans agreed.
A slight regression is infinitely preferable to a market freefall, and there were green shoots of ongoing recovery thanks to a three per cent year-on-year rise in average lump sum borrowing amounts, and a seven per cent rise in total drawdown plan sizes over the course of 2020.
A large part of the market’s resilience has undoubtedly come from its ongoing commitment to innovation and development.
There was unparalleled levels of product development; up until August of last year a new product entered the market every 28 hours, on average.
Alongside new deals interest rates fell, with the market average on the cusp of being sub-four per cent. It eventually settled at 4.01 per cent with certain products offering rates in the region of 2.30 per cent.
As with many in the market in recent years, we’ve firmly believed in the power of product innovation and flexibility when it comes to our product offering.
We’ve sought to create a product that catered not only to those wanting to make increased monthly payments, but also those wanting to subsequently make a single large payment from an anticipated future lump sum, typically from pension pots, inheritance, or investments.
Our commitment to providing market-leading retirement solutions has long been at the forefront of everything we do, and to have that recently recognised by winning the Best Provider for Product Innovation award at the Mortgage Solutions Equity Release Awards has been hugely gratifying.
It’s been encouraging to see the market continue to be a competitive and innovative environment even amid the ongoing challenging trading conditions.
But it’s important that we don’t stop offering customers the confidence of knowing their retirement solution will cater for their needs whatever life throws at them, and it’s up to us as a sector to continue working towards delivering that.