Are female customers more likely to benefit from equity release?

wooden houses, figures of people, piggy banks and rolls of cash on a pink/purple backgfround

Equity release, or the process of borrowing money against the value of your home in the form of a mortgage or loan, can provide your customers with an additional source of income, which can be an essential lifeline in this current economic climate. Doing so grants a homeowner a greater degree of financial freedom which can go a long way in helping them make more of their retirement plans, renovate their home, or gift their loved ones with a financial boost to support them with aspirations of getting onto the property ladder.

Equity release as an avenue for unlocking funds locked up in a homeowner’s property has grown in popularity over the last 12 months [1], for all the reasons we’ve heard a hundred times before (cost of living crisis, utility bills, fuel costs and more). But why is there a disparity between the financial priorities of men and women when considering equity release from their homes?

Why might women be more likely to benefit from equity release?

A study carried out by Standard Life Home Finance, in which a sample size of 500 were questioned, found that women were more likely to discuss releasing equity from their homes with friends and family, but where also more likely to express concerns that it could impact the inheritance they leave behind. Meanwhile, their research showed that men were less likely to worry about the issues of inheritance and interest building up and were already more inclined to take out equity release having ‘no concerns about the process’ [2]. This discrepancy in confidence towards equity release represents an interesting opportunity for advisers, in that there is apt potential in quelling concerns female customers have and making equity release a more attractive and feasible solution for cash-strapped homeowners.

The gender pay gap – Statistics vary between industries/are largely dependent on age groups. However, UK women on average earn less than men. This has the potential to make it more difficult for them to save for retirement or pay off debts [3].
Life expectancy – On average, women in the UK will live longer than men, with their being a 3.8 year difference in favour of women’s life expectancy [4]. This difference means women may need to rely on savings for a longer period, stretching resources further, especially if there had been an additional income to rely on.
Funding retirement – In 2021, almost a third of new drawdown single plans were taken out by female customers [5]. Even for those with the best-laid plans for the future, a growing number of women are using equity release as support in later life. Research conducted by the Equity Release Council previously reported 48% of women who have not yet retired were worried about money when they stop work. In addition, 53% of women were concerned about paying for care if they fell ill – a concern only shared by 20% of men [6].

Woman farmer standing on the background of own farm building with crossed hands.

Equity release and vulnerable circumstances

Advisers are key to helping to explain what equity release is, how it works and then helping customers to assess the terms and conditions of any equity release scheme before making a decision. Regardless of the obvious benefits equity release offers, financial advisers must ensure customers fully understand the downsides and help them explore their options, and any terms and conditions, in minute detail so that they can make an educated decision as to whether equity release is a good idea for them. This is especially the case with later-life customers over the age of 55, who are inevitably more exposed to certain vulnerability drivers.

How you can support customers releasing equity from their homes

Equity release can be a viable plan for those who are looking to secure their financial future and maintain their independence. Whilst it is not without risks, it can provide a source of additional income and financial security for those in need. As an adviser, are you equipped with up-to-date knowledge surrounding the benefits and drawbacks of equity release, so you can offer your customers the best product? Does your relationship with your customer mean you can anticipate what they may require? Do you maintain contact with your customers throughout the year so you can spot opportunities, protect your customers from financial hardship and assist them should they need to release vital funds?

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