This age group took out 58% of new plans in the first half of the year compared to 56% in H1 2014, the highest share of new plans since the Equity Release Council began recording trends in 2011.
One in five new plans taken out in H1 2015 were by customers who had passed their 75th birthday, with 22% aged 75 to 84 and 3% aged 85 and over. Customers aged between 55 to 64 accounted for 18% of new plans, down from 20% in H2 2014.
The value of total lending increased by 11% from £641m to £710m year-on-year.
The report’s findings highlight the shift in the type of plan favoured by equity release borrowers over the last eight years. In H1 2007, 44% of plans taken out were drawdown products whereas 51% of plans were for lump sum equity release mortgages. The popularity of drawdown has clearly shifted. As at the end of H1 2015, 65% of new plans were for drawdown compared to 35% for lump sum.
Drawdown customers take out, on average, an initial withdrawal of £46,958 while lump sum customers typically withdraw £77,494. The statistics revealed differences between the average age of borrowers opting for plan types.
Drawdown borrowers are, on average, aged between 71 and 72 while lump sum borrowers are closer to the traditional state retirement age of 65.
Helen Davies, head of implementation at Partnership, said: “The first six months of 2015 were an interesting period for the retirement market given the introduction of the pension freedoms. While some pundits believe that there might have be a surge in equity release – while people waited to access their pensions – today’s report suggests that this has not happened and we are instead seeing steady sustainable growth.
“Indeed, the rise in the number of 65 to 74-year-olds using this product to improve their standard of living in retirement, an older cohort than might logically access the new freedoms, bears testament to a generation looking to their homes for financial support.”
