While 2020 may be a year that is remembered for being personally and professionally challenging, it’s great to see that the later life industry is already bouncing back, becoming stronger than before.
As we look back at the first half of the year it’s been clear to see that market confidence remains high with over-55s releasing £1.94 billion in new equity release in H1 2021¹ which is a rise of 32% on 2020, with the average customer taking £94,982 an increase of 28%. And with over 750 products now on the market (figures quoted using Air Sourcing), there are more flexible options than ever before to suit the individual needs of the client.
Lockdown has also given clients time to reflect on priorities and immediate concerns with spending leaning towards more needs-based rather than aspirational areas, such as paying off their existing mortgages and debts. Although helping loved one on to the property ladder while taking advantage of the stamp duty holiday has remained popular.
Pension gender gap continues to widen
Research by CEBR (Centre for Economics and Business Research) commissioned through equity release lender more2life revealed that the gender pension gap is widening for women over 55 compared to men.
The research provided in more2life’s Borrowing in Later Life² report suggests that women would have to work an average of 14.5 years longer to accrue the same as their male counterparts, compounded by the gender pay gap. With lower income, women will work longer to support their day to day costs, with less to put in their pension pots. The research also reports that women are missing out on an additional £180,986 in their retirements, despite being better pension savers. This figure is up by £26,673 compared to last year, suggesting that the Covid-19 pandemic has had an effect on both the amount of equity over-55s currently have in their retirement savings and the amount they anticipate to receive after they retire.
How has equity released changed over the past two decades
Key, the UK’s leading equity release adviser, has released a ground-breaking new study detailing its research into how equity release has changed perceptions and improved the quality of life of their customers. The report Equity Release Revolution³ is the first of its kind.
Over the years, equity release has helped clients unlock housing wealth as part of their retirement planning strategy, with the data showing more than £32.6 billion of property wealth has been released with 557,000 customers, and their families, benefitting from the money.
Within the 20 year period, the average age of which people choose to take out equity release has fluctuated, ranging from 68 to 71 years old. Clients have also expressed a positive response to their experience with 67% of customers saying that the funds released from their home have made a significant difference of their quality of life and 90% saying they would recommend equity release to family and friends.
As the market continues to evolve with a wider range of products to cater to the individual needs of the client, and service continuing to expand and grow more sophisticated, it will be exciting to see what the next 20 years bring and Key Group will be here to support yourselves and your clients with that.