Recent research by Key Partnerships reveals that there are now 220 equity release products available to consumers; in 2014, there were only 40, according to Moneyfacts data.
While the surge in demand for later life lending products is good news for lenders, the larger volumes of business means there is no room for complacency.
Firms will need to ensure they continue to invest in technology and develop products to keep up with demand and meet the extraordinary range of lending needs of today’s retirees.
People want more flexibility and choice, so creating products to meet these requirements will be crucial in catering for the growing number of homeowners turning towards later life lending.
Customers who borrow in later life do not start with a product in mind but a problem, such as wanting to repay their interest-only mortgage or improving their standard of living in retirement.
So, with the market constantly evolving, the industry needs to ensure it is innovative enough to meet these customer needs.
However, it is not just product innovation that is required to ensure the later life lending market continues expanding.
We need to offer a better service too, with efficient, digital processes, rather than the slow paper-based practices still used by some lenders today, particularly in the equity release market.
In the future, ever larger numbers of retirees will expect to be able to deal with a lender online.
As such, lenders must ensure they harness the power of technology to achieve a smoother customer journey, as well as keep advisers informed.
Not only will this streamline key processes and lead to more efficient transactions but it will also allow advisers to help more people along the equity release journey.
Modern lending practices
Advisers have a huge role to play in ensuring retirees are aware of all the options available to them to help boost their income in retirement.
Today’s retirees are facing a longer period in retirement than the generations before them, meaning a person’s requirements will continue to shift as they progress through their retirement.
For example, those in their retirement who want to fund their dream holiday will certainly have different requirements from clients struggling with mobility issues who need to adapt their homes.
As such, quality advice is becoming ever more important in achieving the best outcomes for every later life customer.
Advisers can help customers understand exactly what is available and what they require in terms of borrowing – and also ensure that they are promoting responsible lending.
As highlighted earlier, equity release has grown in popularity in recent years and is now a mainstream option for many homeowners looking to supplement their retirement income.
