Equity Release  

More advisers need to take equity release exams

More advisers need to take equity release exams

The growth of debt among older generations will see the equity release market continue to expand in 2019 and advisers must be trained to accommodate the growth, a lifetime mortgage lender has advised.

Stuart Wilson, corporate marketing director at More 2 Life, said while some commentators question whether the equity release market will continue to grow at the same pace seen in 2018, he believes the "fundamental drivers" behind the market remain "constant and unabating".

Mr Wilson said: "While the growth of debt amongst the over 65s is hard to attribute to any single factor, this generation’s use of interest only mortgages, relatively modest pension savings and an increasing number of people reaching retirement with unsecured borrowing are certainly likely to have contributed to the rise.

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"Add to this the need to pay for care in old age, as well as an increasing trend towards helping children and grandchildren get onto the property ladder, and the equity release market should continue to expand in 2019."

In October, the Equity Release Council reported lending in the sector had surpassed £1bn for the first time in a single quarter, as the number of products on offer trebled over the past two years.

Earlier this month membership of the Equity Release Council surpassed 300 firms, as the trade body predicted property wealth would continue to feature heavily in later life planning in the years to come.

A key factor to continued growth in the next year will be finding a greater variety of funding for lenders to help "stimulate" product innovation, said Mr Wilson.

Mr Wilson expects the status quo of funding in the industry to change from traditional life insurers, towards organisations such as pension schemes and wealth management firms as they begin to consider the equity release sector as a good source of investment return.

But Mr Wilson warned the continued success of the equity release market and better consumer outcomes will also depend on advisers offering it as an option to their clients.

He said: "We need more advisers to take the necessary exams to able to advise on equity release or at the very least explore the themes of later life lending with their clients, so that they can pass leads on to specialist firms to complete the advice recommendations if needed."

rachel.addison@ft.com