Aviva will accept new business applications for its home reversion plan, which is funded by Grainger plc, owner of home reversion specialist Bridgewater Equity Release, until 10 February.
It will issue transitional arrangements for pipeline cases nearer the time.
The provider insists it remains “totally committed” to the equity release market and will refocus its offering solely around lifetime mortgages instead, which it can provide completely in-house.
Aviva has developed its lifetime product over the last year to make it suitable to more people, in particular introducing an inheritance guarantee in April 2011.
Clive Bolton, retirement director at Aviva, said: “We remain totally committed to the equity release market – it is a cornerstone for retirement planning, as housing equity is often the largest asset that people have.
“As retirement incomes get tighter and people are living longer, we believe it will become an increasingly important option for retirees.”
Simon Chalk, equity release planner with Bower Retirement Services, welcomed the move, saying: “This is not a negative move at all, because Aviva provided little serious competition to the home reversion space. Its plans gave less for clients’ money than Bridgewater plans, so it is better for the consumer.
“It will allow Aviva to concentrate on an area it has a lot of expertise and skill in, because it basically invented lifetime mortgages.”
Dean Mirfin, group director at Key Retirement Services, said: “As lifetime mortgages have become more flexible, they meet a lot of needs that historically home reversion met. The two products are now much closer together in how much people can raise, while home reversion was the route for those that wanted to protect inheritance.”
He added: “This is not an issue about home reversion, but whether the market is adequately served by the products there and, yes, it is.
“Home reversion is still only a single digit percentage of our business, but a sizeable enough number of people opt for it. We think it is an important enough part of what we do to include it in our armoury.”
Robert Brennan, director of adviser The Right Equity Release, said: “I don’t think this will have any impact on the market. Aviva had nothing to offer the home reversion market, because there were always better products offered under better terms.”
