The Equity Release Market in 2022

The Equity Release Market: Is It a Trend Worth Investing In?
Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui
The Equity Release Market Is One of the Fastest-Growing Industries in the United Kingdom. With an Average Rate of 8% Growth Per Year for the Last Five Years and No Signs of Slowing Down, Equity Release Is the Market to Watch. We’ve Got the Inside Scoop!

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It’s no secret that the equity release market has been growing in recent years, with no signs of slowing down, despite the Covid-19 pandemic!

UK’s poorest retirees are suffering, as experts suggest their benefits amount to less than what is needed for a minimum standard of living.

Of the 11 million retirees in the UK, 2.2 million individuals, or 1.6 million households, live with an average income of £200 a week.

The question on everyone’s mind is whether equity release is a passing phase, or is the rapidly expanding industry here to stay?

Perhaps equity release is the life-changing solution that everybody’s been looking for.

We’ll help you discover:

  • How you can take advantage of the equity release market growth.
  • If there are pitfalls associated with the industry’s expansion.
  • Tips and tricks to help you decide if equity release is the retirement answer for you and your family.

We’ve got the inside scoop!

As experts in the field, we’ve read all the literature, spent countless hours researching over 220 plans, and we’ve done the latest statistical analysis of the equity release market.

Is equity release fly by night or an industry to watch?

Let’s find out now!

4 Reasons You’ll Be Sorry Ignoring the Growing Equity Release Market

What’s interesting to note is that there’s a high rate of homeownership amongst retirees in the UK.

Therefore, later life mortgages truly cater to this niche market and offer an excellent solution to a growing problem.

Equity release continues to be a buzzword in 2022, and the reasons to not ignore the market are endless. Here are just a few:

  • The industry is rapidly expanding, despite the challenges of Covid-191. Statistics indicate that in the first half of 2021, 9,898 plans have already been signed.
  • You can access tax-free income with no limitations on what you can use it for. In addition, you can unlock further equity if your property price increase or you don’t select the maximum amount with your first withdrawal.
  • The loan can be paid off using your life insurance when you pass away.
  • The equity release market has become a legitimate and tightly run industry as years have gone by. High street banks have started offering plans and the market is securely regulated by the Equity Release Council.

3 Advantages of a Growing Equity Release Market  

With 20% of the British population having to postpone retirement indefinitely due to Covid-19, more individuals are seeking solutions to make ends meet.

Luckily, the advantages of the growing equity release market are endless!

Firstly, it’s about competition. As the industry grows and becomes a lot more competitive, interest rates plummeted in March 2021, but have since grown.

That being said, they aren’t yet at their peak.

Additionally, as the industry continues to grow, the consumer becomes more protected.

The Equity Release Council works tirelessly to ensure that you’re kept safe when unlocking the cash tied into your home.

Just be sure to use one of the top equity release companies on the market.

Great news!

If you’re cash strapped3, it’s probably worth mentioning that you don’t have to pay a cent in your life for your equity release plan.

The money is paid back from the sale of your home when you pass away or move into permanent care.

The Risks of a Leaning Into the Growing Equity Release Market  

Like all financial products4, there are also some risks to the growing equity release market.

If you’re considering releasing equity from your home, it’s vital to seek professional guidance from an independent financial adviser.

Financial advisers5 will tread carefully when it comes to lower-income households and equity release.

Experts reveal that a huge proportion of poorer homeowners inquiring about equity release are missing out on thousands of state benefits that they weren’t aware of.

In addition, an equity release should be seen as a last resort, as homeowners should save this solution for the rainiest of days.

It impacts the amount of your family’s inheritance, so be sure to discuss this with your financial adviser.

However, there are fantastic benefits of equity release, so with the right advice, in-depth knowledge, and lots of research, equity release could indeed change your life.

The Growing Equity Release Market vs. Traditional Mortgages  

Great news!

These days, one of the most common equity release uses is to pay off an existing mortgage.

Why? Here are 3 primary reasons:

  • Interest rates are now competitive. Traditional mortgage interest rates are usually around 3% or slightly lower. Current equity release interest are between 3.1% and 6.8%.
  • With equity release, you could score great rates if you’re elderly or unwell. The state of your health does not impact traditional mortgage rates.
  • Best of all, there’s no obligations to make any repayments in your lifetime with equity release. This is unlike traditional mortgages where monthly payments are required.

3 Tips for Making Your Decision

  • Get the best advice. Find a whole market adviser who specialises in equity release.
  • Shop around. You’ll be able to take advantage of the best specials by having a holistic view of the market.
  • Speak to your family. Equity release does impact them so make sure they’re fully aware of your decision.

Common Questions

Why Is the Market Growing?

Is the Growing Equity Release Market a Good Thing?

How Can I Make a Decision About Whether or Not Equity Release Is Right for Me?

How Can I Find Out More About the Growing Equity Release Market?

In Conclusion

Equity release is a growing market that you shouldn’t ignore.

It’s booming, despite a stressed economic climate. With retirement becoming harder to achieve and more of the UK’s elderly population feeling the effects of Covid-19, equity release provides relief for 1000’s.

What’s niche about the market is that homeownership is incredibly common amongst elderly Brits, even cash-strapped ones.

So, if you fall into that category or have kids who need urgent financial relief, equity release could be the best solution.

With careful planning, you could unleash the retirement of your dreams.

So yes, we do think that you should take advantage of the growing equity release market. But only after you’ve explored all alternatives.

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Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

rachel w

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
John Lawson

Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
kath icon

Katherine Read
Consumer Affairs Writer

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date
Writer & Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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