Figures published today by Legal & General (L&G) suggest property is becoming more important for UK homeowners planning retirement.
Figures published by the retirement division of Legal & General show H1 operating profits for 2016 at £406bn, up from £281bn over the same period in 2015.
The 44% increase represents increased demand for equity release products, as consumers seek to cash in on property assets.
Results from L&G also show a year-on-year increase in lifetime mortgage advances of 524% and an increase in annuity assets of 18%.
Nigel Waterson, chairman of the Equity Release Council, said: “Today’s figures from Legal & General are the latest indication that UK homeowners increasingly view housing wealth as a key component when financially planning for retirement.
“With equity release lending having surpassed £0.5bn for the first time across the sector in quarter one of 2016, the news that Legal & General plans to lend £500m this year serves to further enhance the momentum now within the sector.
“Since entering the market in 2015, Legal & General has helped to meet rising consumer demand for equity release products and their recently announced partnership with Santander is set to help more consumers unlock wealth through their home.”
Nigel Wilson, L&G group chief executive, said: “We have continued to execute our strategy well. Shareholders’ profit before tax grew 23% to £826m, adjusted EPS grew 14% to 11.2p, net cash generation grew by 16% to £727m and the Group delivered a 20% RoE. We have a strong balance sheet, which gives us the flexibility and capacity to invest in support of each of our businesses.
“There are many different views of the outlook for economic growth, the state of financial markets and political uncertainty. We reflect this in our approach to risk management.
“While we cannot be immune to this uncertainty, we remain confident that we will continue to deliver attractive returns for shareholders, great value to customers and better outcomes for society. Our five long-term growth drivers, ageing populations, globalisation of asset markets, creating real assets, welfare reform and digital remain unaffected and will continue to provide many growth opportunities.”
Originally launched in 1991 as Safe Home Income Plans, the Equity Release Council is a trade body supported by the leading providers of equity release within the UK.
L&G is one of the world’s largest insurers and financial service businesses, with over £746 billion assets under management.