Changes to pensions set to boost equity release

The far-reaching changes to pensions announced in last week’s Budget will throw up many exciting opportunities in the retirement marketplace including equity release.

Changes to pensions set to boost equity release

This is the view of Age Partnership which believes the equity release sector will benefit as providers develop innovative solutions for meeting consumers’ requirements for income and capital sums for expenditure.

Equity release is a rapidly growing market and the larger providers, such as Aviva and LV, have a broad enough business to continue funding equity release products long into the future. Age Partnership believes they will simply shrug off any disruption to normal flows of annuity business during the transition period before the new rules take full effect in 2015.

It also believes that other smaller more specialised providers such as Partnership and Just Retirement, operating in the enhanced and care fees annuity market as they do, are likely to experience continued growth in demand.

Standing at £35,600, the average pension fund used to buy an annuity is dwarfed by the average £254,943 property value from which homeowners chose to release an average £56,917 of equity in 2013. Age Partnership believes the issues created by increasing longevity and need for long term care are not going to go away so, irrespective of how people choose to take their pension pot, they will increasingly rely on their greatest asset – their home – to provide for their future.

Commenting, Simon Chalk, technical manager of equity release at Age Partnership, said: “Increased choice is naturally very welcome but it invariably leads to greater confusion and indecision, meaning customers will seek the reassurance of qualified advice and guidance from those intermediaries best placed to cover the full spectrum of income and capital generating products in retirement.”

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Categories: News, Property

About Author

Nia Williams

Nia Williams is editorial director at The Publishing Group, Every Investor’s parent company. She is responsible for editorial content across the firm’s many publications which also include Propertywire, Mortgage Introducer, Bridging Introducer, Homebuying and Tech City News. Nia is one of four founding directors of The Publishing Group which was established in 2008. Previously she was publishing and editorial director at Charterhouse Communications for 16 years, developing and launching its many mortgage titles and events, as well as editing various personal finance titles.