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Demand For Later Life Planning Advice Grows

Updated: Mar 18, 2022

later life lending

The later life financial planning market has significantly grown in recent years following a demand from older consumers seeking advice in accessing property wealth via equity release.

More and more Brits are using their homes to unlock money to fund themselves later in life.

Late last year, research conducted by Canada Life suggested that an increasing amount of people will look to raise income by releasing equity from their homes and nearly 14 million plan to keep their current property rather than downsize.

An option that is growing in popularity is equity release, an option 6% of respondents stated they would do. Recent figures from the Equity Release Council show that their members have almost doubled in two years.

Their Council membership has grown from 219 to 431 firms in a two year period which confirms the increasing demand of people using property wealth in their plans for later life.

A diverse cohort of firms signed up to become members in 2019, namely Openwork, Knight Frank Finance and StepChange Financial Solutions.

In 2019 only, there was a yearly increase of 35 per cent in Council memberships, growing from 246 to 332, and the number of law firms also grew by 46 per cent from 41 to 60.

As more and more customers seek support in this growing area, the Equity Release Council received a record number of 146 new joiners in 2019 – now more than 100 companies have now become council members annually in the last two years.

Not only have members rose in organisations but also individual member registrations too, rising by 77% from 673 in December 2017 to 1,193 today.

David Burrowes, Chairman of the Equity Release Council commented on the figures. He said:

“The option of accessing property wealth increasingly registers on people’s radar when planning for later life. The Council’s growing membership means more people can access the highest level of consumer protection for any property-based loan when exploring whether equity release or alternative products can help to meet their needs.

“The UK’s ageing population faces longer life expectancies, intergenerational pressures and more individual responsibility to make financial provisions. The challenges of a 21st century retirement mean that, while unlocking property wealth is not suitable for every circumstance, it should be on every homeowner’s checklist to consider.

“There is more work to be done in the year ahead to build on recent product innovation and maintain standards of consumer protection. The Council will continue to work with policymakers, regulators and industry to promote better understanding of today’s later life lending products and the social benefits they bring.”

With this area of the market continually evolving the Equity Release Summit in March will provide a perfect opportunity for members and stakeholders to collaborate and discuss key themes and trends, challenges and developments within the later life industry.

As demand for equity release grows so does the gender gap of those customers who require advice too. According to new research from equity release HUB Financial Solutions, retired single women are twice as likely to generate cash through a lifetime mortgage than men.

The data revealed that single women accounted for 30 per cent of lifetime mortgage business in the first half of 2019, in comparison to 17% for single men.

Women typically start their retirement with a smaller pension than men, which has found to be because of complete lack of pension awareness and the criteria involved in auto-enrolment.

Government statistics reveal there are 1.7 million widowed women over the age of 70, nearly triple the 613,000 widowed men. Furthermore, seven in 10 of all those over 70 years of age not living in a couple are women.

In addition, 45% of retirees in the lowest income groups are single women compared to just 14% of single men, with couples making up the remaining 38%.

Simon Gray, managing director of HUB Financial Solutions, commented: 

“The equity release market is seeing rising business from single people and our specialist advisers helped nearly double the number of single women as single men in the first half of 2019.

“Generally, we see single men and women releasing about the same amount of equity at about the same age – most commonly from 65-74 – from homes that are similar value albeit lower than for properties owned by couples.

“We believe single women are going to be an increasingly important demographic for advisers as growing numbers seek to supplement their pension income and think about estate planning and helping children via ‘pre-inheritance’.

“Male life expectancy has been increasing but women continue to live longer so it is more important that they consider insuring against outliving their pension assets.

“With more years to fund and smaller pensions on average, it is arguably more important that single women make robust financial plans and take professional advice, including, where appropriate, how to access the value locked-up in their property that could be released to help them achieve a better later life.”

To find out how we can help you with your later life lending and equity release goals, please contact us.

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