Mortgages  

Equity release option ‘imperative’ in pension market

Equity release option ‘imperative’ in pension market

Retirement lending and equity release are viable options in people’s retirement thinking, Bernie Hickman has said.

His comments came a week after the Association of Mortgage Intermediaries predicted that equity release lending would reach £5bn a year by 2020.

“With life expectancy increasing and many struggling to save enough money during their working lives, more and more people will need to access the wealth locked in their homes to fund retirement,” L&G’s Home Finance managing director said.

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He said it was imperative to have equity release options in the marketplace.

“The next five years will see consumer demand increasing, at the same time as more innovative products are brought to the market, making this a very exciting time to be in the retirement lending industry,” he added.

The FCA recently said it believed equity release could play a part in people’s retirement income choices.

Adviser View

However, Will Hale, director at Lancashire-based Key Partnerships, warned that equity release was not always appropriate, and people needed proper advice. He said: “It has to be acknowledged that not all advisers want to specialise in this area, and equity release can come with the risk of significant customer detriment if advice is not appropriate. As the equity release market grows it is important that advice standards are maintained.”