The Equity Release has urged the next government to abandon the ‘semi-detached’ attitude towards equity release that has been held by previous governments.
Today (2 May) the Equity Release Council said the government should establish a dedicated policy team committed to promoting equity release as a safe product that should be on all homeowners’ retirement planning checklist as they approach later life.
Nigel Waterson, chairman of the Equity Release Council, said: “A major consequence of reforms to the retirement landscape is that pensions are now fully realisable and inheritable assets, just as other financial assets and property are.
“This makes it possible for retirees to plan their finances by considering all their assets, including their home.
“For many homeowners, the logical conclusion of a more structured approach to retirement planning will be outcomes that include the release of housing wealth to meet a range of financial needs.”
The Equity Release Council’s remarks came as new figures from Retirement Advantage Equity Release revealed a growing range of reasons why people were using the product.
The most popular reason for the uptake of equity release loans among their customers in the first quarter of 2017 was to clear an existing mortgage or to make home improvements.
The percentage of people who took the loans to help with daily living expenses rose from 15 per cent in 2016 to 21 per cent in the first quarter of 2017.
Meanwhile, a growing percentage are using them to gift to family members (16 per cent) and go on holidays (16 per cent).
Alice Watson, head of marketing at Retirement Advantage Equity Release, said: “Clearing mortgages and making home improvements have always been popular reasons for using equity release.
“But what these figures show is that there is a wide range of lifestyle factors which are becoming increasingly important as people plan for retirement.
““People want to enjoy the years they have after a lifetime of work – whether that means gifting to their loved ones or going on holiday. And as we approach summer, it’s only natural that people will start to make holiday plans.
“As interest-only mortgages continue to mature over the coming months, we expect to see more people using equity release to help make up any shortfall.
“But our figures reinforce the diversity of use of equity release today, and is another sign that as the market matures, it has the ability to be flexible and meet a wide range of customer needs.”
emma.hughes@ft.com
