The Government has been accused of not doing enough to promote equity release as a source of income in retirement, according to a poll at the Great Retirement Money Debate held by the Equity Release Council.
Of more than 150 representatives from providers, advisers, membership bodies, charities, think tanks, and others across the retirement industry, 84 per cent felt that the Government should improve its efforts to promote the option of releasing equity from property.
Opinion was split down the middle regarding whether the changes to pension rules will provide a benefit to consumers, but 75 per cent thought the pension freedoms would have a positive impact on the equity release industry.
However, 36 per cent thought the freedoms would prove to be a disaster, with the greatest fears around access to advice and the risk of consumers falling for scams. Only 15 per cent of the audience thought that the freedoms would have no long-term impact on the market.
Nigel Waterson, chairman of the Equity Release Council, said, “When parliamentary business resumes, the new government simply cannot afford to keep putting its eggs in one basket and overlooking the potential benefit of more people tapping into their housing wealth. We urge the Treasury to take ownership of the issue and focus efforts across government on signposting consumers to consider equity release among their options for funding retirement.”
The Council recommended that the government start by using Pension Wise to convey the benefits of equity release to those coming up to retirement.
But consumers need to be aware that equity release is not a good option for everyone, and that it can be difficult to make it a sole source of retirement income.
Daniel Bailey, mortgage adviser at Middleton Finance, said, “Equity release is very specialised area and is certainly not for everyone. Ideally retirement would be funded through a mixture of pension and property. However, there are situations where people need to supplement their retirement income.
“Equity release is an option that would allow you to raise funds against your property to help supplement your retirement income, and it is imperative to speak to an expert who specialises in equity release.”
The Council also urged providers to explore product innovation based on consumer needs, believing that the arrival of new providers in the market will improve these efforts, but also that more advisers need to be recruited to help boost the availability of financial advice.