Steve Kyle, secretary general of EPPARG, said: “Our discussions are taking place at a crucial time. About five years ago, EU institutions commissioned studies on home equity release and, since then, the world has completely changed.
“Traditional pension mechanisms are unable to cope with the combined impact of the challenges which we are now experiencing in Europe, namely a rapidly ageing population, growing youth unemployment and sluggish economies.”
EPPARG is discussing a number of research papers, including a major study by consulting firm Towers Watson. The study, which will be widely available shortly, highlights concerns that the costs of providing for the ageing population will be prohibitive. It also includes an estimate that there is potential for over €20bn to be released from home equity release products each year and €200bn over 10 years which could respond to growing consumer need.
Kyle added: “Home equity release is a solution which can both help to address the intergenerational burden of a smaller working population paying for an increasingly large retired population and to provide an immediate help to the current elderly population, who have been wise enough to invest in buying their own home, but have a pension shortfall.
“At an economic level home equity release can provide impetus to local economies and reduce the strain on State provided benefits.
“If we can begin a discussion between the European institutions, charities, academics and industry on how we could safely develop for elderly consumers home equity release across Europe, it may play a key role in the path of transforming the lives of older people now and the generations to come.”