The majority of advisers (61%) believe it is “likely or more likely” equity release will become a mainstream product within five to 10 years, research by LV= has revealed.
In 2018, LV= saw a 77% rise in sales and the overall equity release market was worth £3.9bn.
Andrew Gilbert, director of proposition, savings and retirement at LV=, said: “Equity release is increasingly being seen as a mainstream option in retirement – and rightly so.
“The government last year backed a select committee recommendation that the new Money and Pensions Service signposted retirees to consider home finance options including equity release as part of a broader retirement planning strategy.
“I believe that it’s our job to equip advisers with the knowledge and products they need to provide their clients with the right choices to support their retirement.
“Our findings highlighted that only a quarter (25%) of advisers felt most informed about equity release – this is compared against 91% for pensions and 74% for annuities.
“The Equity Release Council also plays an important role, providing a wealth of online materials including the Adviser Guide to Equity Release.
“The resources are out there for advisers who want to make the most of this increasingly mainstream retirement planning option.”
Advisers said the most common reason clients took out equity release was to supplement their retirement income (63%), provide financial support for loved ones (32%), home improvements (26%) and pay-off debt (25%).
Despite the rise of equity release, more than two-thirds of advisers reportedly encounter barriers when advising clients to take out an equity release mortgage.
The biggest barrier is deciding whether equity release is suited to their clients’ needs (26%), followed by having to explain the complexity of the product (21%).