The ERC’s 20-page Equity Release Market Report also showed equity release rates have fallen by an average of 50 basis points since 2011 and are now at roughly 6.3 per cent.
The report said most equity release products are sold through IFAs, who account for 97 per cent of sales despite more than half of customers learning about it online – more than twice as many as are prompted by a financial adviser or introducer.
Nigel Waterson, chairman of the Equity Release Council, said: “In a climate of low retirement incomes and a recovering housing market, equity release offers an increasingly attractive way to live comfortably in later life without sacrificing the place you call home.
“No one retirement product offers a blanket solution to achieve financial security, but increasing numbers are finding an answer through equity release, and it is an important and flexible option to consider.”
Some advisers have been using drawdown to help clients supplement their income due to poor annuity and savings rates. Drawdown can be more cost-effective and flexible than single advance, which may suit clients who do not know how much they will need, or when.
Dean Mirfin, director of national advisory firm Key Retirement Solutions, said, in order to give clients “best advice”, advisers should probably be recommending drawdown more often than single advance equity release.
He said: “Given the low level of interest rates, and equity release rates being around 6 to 6.5 per cent, where are you going to get that sort of return if you take a lump sum and leave it sitting in the bank?”
