Equity release helps more people finance retirement

Growth in over 55s equity release 

The Equity Release Council Spring 2019 Report shows that total annual equity release scheme lending grew for the seventh year in a row in 2018, with 50p of housing wealth being unlocked for every £1 of flexible pensions payments across the year. The number of people taking out lifetime mortgages grew proportionately more than any other sector of the mortgage market – up 25% on 2017 – with lifetime loans now making up a third of new mortgages among people in their mid-50s onwards. 

Equity release lending patterns 

The increase in the number of equity release schemes taken out grew by double digits in all regions in 2018, with the East of England leading the charge (158% growth), closely followed by the South East (143%) and London (138%). But while total equity release lending increased to nearly £4 billion, the average amounts of property wealth withdrawn remained roughly stable, showing broader uptake rather than increased loan size. 

Equity release product options 

The increase in demand for equity release schemes for the over 55s has been matched by an increasing product range by lenders. By the start of this year, the number of product options meeting the Equity Release Council’s standards had doubled to 221 in just 12 months. The growing number of products also offers customers more flexibility and choice; of the new plans taken out in the second half of 2018: 

• 25% allowed customers to make interest payments to reduce the overall cost of unlocking property wealth
• 27% featured downsizing repayment options 
• 87% allowed customers to pay back some of the loan with no early repayment charge. 

Equity release schemes aren’t the right solution for every situation, but they are increasingly important in helping people realise their retirement dreams and fund their later life.