Pension changes boost interest in equity release

Pension changes boost interest in equity release

Pension freedoms introduced last month have helped increase interest in equity release, Age Partnership has claimed.

Age Partnership said it had advised on nearly a quarter of all equity release sales in the first three months of 2015, up from 20.3 per cent during the same period in 2014.

The company said the number of equity release products used by UK consumers had risen 2 per cent during the same period, up to 4,880 from 4,784 in the first quarter of 2014.

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Age Partnership, which provides advice to pensioners, said it had invested heavily in its service to clients by providing national face-to-face offering following demand from customers.

Simon Chalk, technical manager of equity release at Age Partnership, said: “Adding our field-based adviser team has made a huge difference to our business. While some customers are happy to seek advice over the phone, others prefer a personal, face-to-face service, and Age Partnership now offers both options.

“Our view is that the new pension freedoms mean equity release will become an increasingly mainstream option as clients use the value locked up in their home as part of their overall retirement income strategy.”

Mr Chalk said he believed that having more choice in how they use their pension savings would encourage consumers to look at how they could use all their assets to deliver the retirement lifestyle they wanted.

Adviser view:

Dean Mirfin, group director for Preston-based Key Retirement, said: “I think it may be a bit too soon to call the real impact of the pension freedoms, but it has generated some interesting conversations with clients. We have seen some increased demand among people looking for income, with many people seeking to pay off secured or unsecured debt.

“Because of the tax implications of cashing in, considering equity release as an option to provide income could be an alternative.”