Press release

Advisers see equity release becoming mainstream within 10 years


The majority of advisers (61%) believe it is likely or more likely equity release will become a mainstream product within five to 10 years.
 
A study1 commissioned by LV= into advisers’ attitudes towards equity release has found that it has been growing steadily in popularity. 
 
In 2018, LV= saw a 77% rise in sales and the overall equity release market was worth £3.9bn.
 
Advisers said the most common reason clients took out equity release was to supplement their retirement income (63%), provide financial support for loved ones (32%), home improvements (26%) and pay-off debt (25%).
 
Barriers to advising on equity release
 
Despite the rise of equity release, more than two-thirds of advisers (70%) encounter barriers when advising more clients to take out an equity release mortgage. The biggest barrier is deciding whether equity release is suited to their clients’ needs, followed by having to explain the complexity of the product.

 

Barriers faced by advisers  Percentage 
 Deciding whether equity release is suited to my client’s needs 26%
 Explaining complexity of equity release to clients 21% 
 Knowledge of equity release products on offer 18% 
 Explaining the cost attached to equity release to my clients 16%
 Other 11% 
 I don’t face any barriers 30%

 

Misconceptions over equity release

Some consumers also misunderstand equity release.  Nearly half of advisers (48%) had clients who think they will end up owing more than their home is worth, and a similar number (46%) say clients are often worried that equity release will leave them unable to pass their house on to their family. 

More than half (55%) are worried about how equity release will impact the future ownership of their home, while one in three (32%) are concerned that it will lead to them taking on more debt.


Andrew Gilbert, Director of Proposition, Savings & Retirement at LV=, said:

 “Equity release is increasingly being seen as a mainstream option in retirement – and rightly so. The Government last year backed a Select Committee recommendation that the new Money and Pensions Service sign-posted retirees to consider home finance options including equity release as part of a broader retirement planning strategy.

“I believe that it’s our job to equip advisers with the knowledge and products they need to provide their clients with the right choices to support their retirement. 

“Our findings highlighted that only a quarter (25%) of advisers felt most informed about equity release – this is compared against 91% for pensions and 74% for annuities. 

“The Equity Release Council also plays an important role, providing a wealth of online materials including the Adviser Guide to Equity Release. The resources are out there for advisers who want to make the most of this increasingly mainstream retirement planning option.”

 

Notes to editors: 

1Research among 206 Independent Financial Advisers between 28 June and 3 July 2019, conducted by Opinium on behalf of LV=. 

About LV=

LV= is a leading financial mutual and serves over 5.8 million customers with a range of financial products. When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products. We offer our services direct to consumers, as well as through IFAs and brokers.

LV= and Liverpool Victoria are trademarks of Liverpool Victoria Friendly Society Limited (LVFS) and trading styles of the LV= Group of Companies. LVFS is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered number 110035. Registered address: County Gates, Bournemouth BH1 2NF.

 

Press contact

David Gwyer
Media Relations Manager – Life and Pensions
020 7634 4311
07798 796907
Candice South
Press Officer, Life & Pensions
0207 6344 497
07867 141 547