IBM Business Consulting Services is predicting huge growth in the number of companies offering current account mortgages and equity release schemes, due to growth in customer demand. Average personal net wealth is estimated at £70,000, up from £64,000 in 2000, as the UK has become increasingly equity rich but cash poor, according to a report, Personal Wealth in Britain.
The report has concerns over equity release products: ‘Those companies selling these products should be doing more to advise customers on how best to use this windfall. ‘
The report noted equity in property is worth £1,000bn, an increase of £245bn in two years. This has more than offset the £182bn that people have lost in the value of their stocks and shares investments over the same period, and this has reduced the level of liquid assets from 30% in 2000 to 23% in 2002.
Rohitha Perera, principal at IBM Business Consulting Services, said: ‘The opportunity for retail financial services companies is to design products and services that truly help customers enhance, maintain and protect their portfolio of wealth. However, initial research suggests many companies will find it difficult to make the necessary changes.’