Equity Release needs more support from Westminster
Chris Prior is Manager Sales and Distribution at Bridgewater Equity Release
In order for the equity release sector to continue to grow and blossom, it needs to both continue to raise its profile and garner the necessary support from Westminster. There is still work to be done on both counts, but it was encouraging to see the cause aided by the recent publication of the Ready For Ageing? report by the House of Lords Committee on Public Service and Demographic Change. It will surprise absolutely no-one to learn that the gist of the document echoes what those of us in the industry have been warning for years – “that our rapidly ageing population will have a huge impact on our society and public services and unless Government and all political parties address this, the gift of longer life could lead to a series of crises”.
Whereas previous reports of this ilk have sometimes ignored the potential of equity release to help address the financial shortfall encountered by many in old age, this latest publication acknowledged the role our sector can play. Indeed, the authors posit that, “it is reasonable to expect those who have benefited from the property boom to support their own longer lives” and recognise the versatility of the plans in that they can help pay for the cost of social care, adapting one’s home and supporting their incomes.
The committee even appreciate the impact on inheritance while conceding that attitudes to the above are changing, as we at Bridgewater have long been reasoning. While the report does concede that equity release plans are currently under-used and that many older homeowners lack the requisite confidence or knowledge to begin utilising them, it does also apportion a fair amount of responsibility for rectifying this at the State’s door. It goes as far as explicitly stating that the Government needs to work with the financial services industry to encourage the growth of a safe and easy-to-understand equity release market, emphasising key existing attributes such as negative equity guarantees.
The majority of the report was music to our ears and further reaffirms what many key equity release stakeholders have been saying for years, but it also serves as a frustrating reminder that the equity release sector has been unable to kick onto the next level and help more older homeowners than it does currently. Also, useful as support from the House of Lords is, it doesn’t represent the same fillip that backing from the House of Commons might. It was also disappointing to see rather limited coverage of the report in the media and what there was either omitted the equity release backing or did the sector something of a disservice.
Much as we in the equity release sector and the Government have a responsibility towards older homeowners to help them explore the full range of options that could help them fund their later life, there is also an onus on the media to present the facts and not reinforce misconceptions.