That is certainly a credible picture to paint, and it’s clear that homeowners are now much more likely to be aware of equity release and the options it provides.
That said, further research from SunLife reveals this is by no means universal, and I would probably suggest that for every new client we have that is taking out a later life product, we have thousands upon thousands of older homeowners who are effectively in the dark when it comes to the options available to them.
The research revealed that, of a survey of 1,000 over-50s homeowners, nine out of 10 were (at best) unsure of how equity release worked, with common misconceptions coming to the fore around how it might mean they lose their home, not knowing the cash lump sum was tax-free, and believing children might be liable to pay off any debts somehow left behind.
Education, education, education
So, even those who are clearly in the potential borrower demographic for equity release need educating on the possibilities, the actual key parts of the product and what it means for them, and the roadmap through to advice.
However, I’m also very much of the opinion that this is not a solution purely for one type of homeowner – those living in high-value homes. From my perspective, later life lending need is pretty much classless in that there tends to be a requirement across all types of homeowners.
I’ve talked a lot in the past about how incomprehensible it is to me that we have pensioners sitting in properties worth hundreds of thousands of pounds feeling they can’t put the heating on when they need it because it costs too much. Or who are putting up with a standard of living far below what they could actually afford if they were provided with advice where they could access that equity.
By the same token, I absolutely get the growing draw towards later life lending/equity release from those living in much higher-valued properties who, for example, want to access their equity to help children with their own deposits or want to carry out renovations, or indeed want to use that money for experiences, new cars or holidays.
Paying for care
And then we have those who may simply want to utilise their equity to supplement their pension provision, or to ensure they can afford for long-term care needs for themselves or their partners.
In a way, equity release or later life lending can provide a solution for older homeowners who sit at all levels of income and housing wealth, who have a variety of needs which range from the basic to, what some might describe, as opulent. That in itself is the beauty of these products, that with the right advice of course, they can be used to provide for any number of client needs.
However, perhaps the biggest opportunity for advisers in this space is the sheer number of homeowners who simply don’t know what they don’t know; who have a need but no understanding of what they could achieve, or that their greatest fears about equity release/later life lending are simply unfounded. There lies the big opportunity for our sector and one that if we can focus on is likely to drive significant business growth for all.