However, there is no getting away from the fact that a client in financial services may approach a transaction differently depending on their gender. With the foundation of good advice being that it is unique and tailored to the specific needs of each individual customer, we decided to interrogate our ‘lightbulb’ moment research through this lens.
The research was undertaken on over 500 people who had either taken out equity release or after engaging decided to look at other options.
The ‘typical’ customer
It makes sense to start by understanding who the ‘typical’ equity release customer is.
Key’s H1 2022 Market Monitor suggested that while married couples account for 60 per cent of plans taken out, single women account for 26 per cent which is far higher than single men (14 per cent). In this context, single is defined as unmarried, divorced or widowed.
So what is driving almost twice as many women as men to take out equity release? It is no secret that women have lower pension pots, usually due to lower income and/or time away from the workplace for caring responsibilities. This is a trend which will only be exacerbated by the cost of living crisis that is showing no sign of slowing down.
The impact of this on decision making needs to be considered – especially when you consider the potential element of vulnerability.
I am certainly not saying that women are inherently vulnerable. Anyone, of any gender, who has recently gone through a divorce or bereavement for example and is worried about their financial future could potentially be vulnerable.
However, with women living longer, they are more likely to be in this situation – especially if their partner has ticked the ‘wrong’ box on their annuity form and signed up for a single rather than joint life plan.
Impacted by life events
Indeed, 13 per cent of women say they took out equity release as a life event such as a divorce, redundancy, or illness derailed their existing plans so they had to consider other options – three times that of their male counterparts.
More women (29 per cent) also admit to being confused when realising they needed more money to meet their needs as they know what they wanted but didn’t know how to achieve it (men – 14 per cent).
Interestingly when thinking about releasing equity, women (39 per cent) were less concerned about being unable to leave an inheritance than men (46 per cent) but more worried about the possibility of losing their home which they viewed as their security (41 per cent vs. 34 per cent).
The research also highlighted that women had typically already discounted downsizing or selling their homes to move in with family or into rented accommodation so clearly this security is important.
When speaking to an adviser, women were also more hopeful than their male counterparts that the adviser would be able to help them and more likely to worry that they would be judged for some of their financial choices.
The latter point is particularly frustrating as not only are advisers there to help people make the right choices for their individual circumstances, but you can’t help but wonder how many people don’t speak to an adviser for this very reason.
Having spoken to an adviser, chosen equity release and received the proceeds, almost twice as many women (60 per cent) said they were relieved when compared to men (33 per cent).
While this is a whistle stop tour through research we will be releasing more fully in due course, I am hopeful that it will help advisers as they continue to build their understanding of what motivates and drives the different demographics they serve.
