We’ve got exciting news to share!
If you don’t listen up, you could end up losing out on the retirement-friendly financial opportunities that you’ve been looking for.
Getting older has never been better.
We’ll help you discover:
- How the equity release industry is looking in Jan 2022.
- Details of how the industry has increased in popularity.
- Disconceptions about equity release.
At SovereignBoss, we’re constantly looking for ‘the story’. Our goal is to deliver up-to-date content, highling the latest equity release news in Jan 2022
In recent years, more and more people have been turning to equity release to fund their retirement. As the number of people approaching retirement age is on the rise, more equity release product offerings pop up on the market.
This means that an increased number of people need to find a means to supplement their retirement income. This new demand for equity release products is good news for homeowners who no longer want to keep up with mortgage repayments. Those who have seen the value of their property fall below what they owe on it.
Equity Release Plans Increased
With 769 different equity release plans currently available, the number of equity release products offered has reached a 15-year high.
According to research released by retirement expert Key Group1, the number of products allowing UK homeowners access to the capital in their residences has more than doubled in just two years, from 306 in 2016 to 606 in 2019.
The equity release sector has been working to restore its reputation, which was tarnished2 in the 1980s and 1990s as a result of a series of scandals that left consumers in massive debt. However, a consistent increase in demand for equity release options has fueled a surge in products on the market in recent years.
Equity release sales roughly quadrupled between 2013 and 2018. According to the Equity Release Council3, the number of product possibilities increased from 86 in January 2018 to 221 in January 2019. When there were just 38 product options on the market in 2007, data was initially electronically recorded.
Equity Release Misconception
Equity release has long been regarded as a taboo4 subject in the United Kingdom. It’s a useful product with a dreadful reputation. The industry is attempting to address this by reframing it as a retirement option and employing a comprehensive strategy.
One of the most common misunderstandings is that people use equity release to go on a cruise where in fact, it’s a great way to assist kids to get on the property ladder. Equity release could be more tax-efficient than a pension if individuals start thinking of their home as an asset rather than a piece of real estate.
Now, a group of companies is collaborating with the Equity Release Council (ERC) to improve the sector’s image. They’ll start with a whitepaper, which will be produced in the coming months and aims to dispel some of the frequent misconceptions about the product and modify people’s opinions about property wealth later in life.
Key Group’s data follows the pattern of other organisations’ research, albeit the final numbers may be a little overstated. In April, Moneyfacts5 recorded a new high for equity release arrangements. By the beginning of June, the financial information firm had counted 566 items on the market.
What's the Most Popular Type of Equity Release Mortgage?
By far the most common sort of equity release type, lifetime mortgages account for the vast majority of the market. You are not compelled to make any payments with any lifetime mortgage plans, and you will retain 100% ownership of your house.
What Types of Equity Release Product Are There?
Lifetime mortgages and home reversion schemes are the two primary types of equity release available.
The number of equity release products on the market has increased over time. This is because people are living longer and they want to be able to enjoy their money in retirement.
However, with an increase in these specific types of products come more opportunities for fraudsters who would take advantage of unsuspecting victims. They’ll do so by selling them a product that will not work as promised or even worse make it impossible for them to get out from under any debt incurred due to purchasing such a product.
To avoid this you should always do your research before deciding what type of equity release plan you need. This way, you can find one which best suits your needs, without incurring unnecessary expenses or losing control over assets like property and investments. We’ve got your back!