Equity Release  

Cost of living crisis has led more people to drawdown, says adviser

Cost of living crisis has led more people to drawdown, says adviser
Will Thom, adviser at Key Later Life Finances

The increased cost of day to day living has led more people to consider drawdown facilities, according to 26-year-old Key Group adviser Will Thom.

Speaking to FTAdviser, Thom said with everyone adjusting to post-pandemic life, he has started to see a shift back towards people releasing equity to pay for home improvements and to help their families, as well as some aspirational spending such as going on holiday. 

“In addition to this, the increased cost of day to day living has led more people to consider drawdown facilities to give them further security in the future,” he said.

“Having trained as an adviser, I know that a range of options are looked at by specialist advisers but I do think there is still some way to go in making sure that all available options including later life mortgages and Retirement Interest-Only mortgages (RIOs) are fully integrated into the advice process. 

“As a young adviser I think the perception of equity release is certainly something that I can have an impact upon in terms of educating as many people as possible. I see equity release advice as similar to pension advice whereby it’s something that should be considered as part of complete and holistic later life planning.”

Thom has been an adviser for 12 months and works as part of Key Later Life Finances advice team in the North West.

He studied Economics at the University of Manchester and started at Key Group in a non-advice role, as part of the customer engagement team.

“[This] allowed me to gain knowledge in the sector,” he said. 

After a few years, he joined the internal adviser academy training programme and passed CeMAP and CeRER qualifications. 

Thom said one of the most popular reasons people take out a lifetime mortgage is gifting to family - mainly to help them onto the property ladder. 

“Many of my clients believe their children need the funds more now then they will when they pass away,” he said. “In addition to this, showing the clients how the interest compounds over time gives them an idea as to what inheritance they will be able to leave. 

“I always tell my clients that family members are welcome at any appointments if they want them to be there and often this gives them the chance to ask any questions or to raise any concerns they have.”

Maintain standard of living

Meanwhile, 30-year old Nurlana Kerimli (pictured) has been an adviser for five years and works as part of the Key Later Life Finances advice team.

She began advising on standard mortgages including Retirement Interest-Only mortgages (RIOs) and found that in a lot of cases, it was hard for customers over a certain age to meet the affordability criteria. 

“I decided to broaden my scope of advice so that I could help offer more options to customers who couldn’t fit the standard mortgage/RIO box,” she said.