In all the hullabaloo surrounding our newfound pension ‘freedoms’ it is easy to forget that there are other areas of personal finance out there in this great country of ours where people are screaming out for quality financial advice.
One such area is equity release – a road my mother and father cautiously trod down a couple of years ago to boost their meagre income – a small annuity and a state pension – and extract some financial value from their beautiful bungalow situated on the outskirts of Sutton Park in Birmingham.
They seem perfectly happy with the outcome, although Dad is not well at the moment and I do not like to pry too much about their delicate finances. All I know is that a small inheritance, when the time eventually comes, is out of the question.
The equity release market certainly seems to be in robust health judging by the recent contents of my work email inbox.
Over the past couple of days, I received an email from “nationwide retirement specialists” (their words, not mine) Retirement Experience on the lookout for “exceptional equity release advisers”.
“The market for equity release is growing rapidly and Retirement Experience is expanding to cope with the demand,” it went on. The carrot that is commission – “excellent commission rates” no less – was dangled before my very eyes. Despite the “excellent remuneration package” on offer I will not be applying this time around, although given all the negativity around the future of print journalism I cannot rule out a later-life career change.
It is not just an invite to join the equity advice fraternity that I have received. I have also been asked if I want to release equity from my home by a company called Equity-Release1. Again, it is not an offer I will be acting upon for a very long while, but thank you all the same Equity-Release1 – allegedly the “prime equity release comparison site in the UK” (yes, their words, not mine).
The latest data on the sale of equity release plans suggests that demand among elderly homeowners is robust. In the first quarter of this year, nearly £341m of property wealth was released through equity release plans – up some £11m on the first quarter of 2013. Plan sales for the quarter rose from 4,983 to 5,100, prompting Dean Mirfin, technical director at Key Retirement, to proclaim that “property wealth is a major part of retirement planning and the contribution it can make is substantial, with customers releasing nearly £67,000 on average”. I do not think you can argue against that assessment.
Indeed, Bower Retirement Services, a growing force in the equity release advisory space, is predicting that the equity release market could double in size in the near future as consumer awareness increases and elderly people battle against a combination of inadequate pension savings and paying down existing debts. For advisers qualified to operate in this market, good times are surely around the corner.
The equity release market today is certainly far more consumer-friendly than the one I viewed with great scepticism 30 years ago when the likes of Fisher Prew Smith were running amok with its Rainbow equity-release scheme, and insurers were withdrawing from the market fearful of tarnishing their image further.