Alice Watson is head of marketing and communications at Canada Life Home Finance
Whether it’s relationships, a job offer or selecting the right home finance product, expert and trusted advice helps us make the best decisions.
And while financial advice is a prerequisite for taking out a lifetime mortgage, consumers rely on advisers to give them clear and quality guidance.
That is why Canada Life has invested its resources in running workshops that are designed to help advisers become experts in later-life lending, ensure consumers receive the best home finance product, and ultimately fuel market growth.
As many in the industry are acutely aware, the future of long-term care in the UK is anything but certain. The government green paper on social care is yet to see the light of day, and data from the World Economic Forum finds that the average retiree in the UK will outlive their savings by about 11 years.
But recent research by Canada Life finds that a quarter of people in the UK would rather unlock equity from their property than use their pension pot to pay for care costs in later life, an increase from 2016.
This is a real vote of confidence in the industry, with more consumers clearly viewing their wealth holistically and identifying how their property can be used to fund their later life.
At a time of political and economic turbulence, it’s reassuring that advisers will bring an air of calm to conversations with their clients, explaining how releasing their property equity can give them peace of mind in retirement.
While we like to think of lifetime mortgages as relatively accessible home finance products, we shouldn’t underestimate the skills that enable advisers to assimilate market data, available products and the client’s financial situation in order to explain their options to them in a simple and informative manner.
And the proof is in the pudding: £1.85bn of equity was released in the first half of this year; and at the end of Q2 2019, we found that there’s some £382bn worth of equity contained within UK homes.
This represents a significant trove of wealth that some homeowners aged 55 and over can draw on for a range of reasons – whether it’s easing the financial burden of later-life care, renovating their home or paying for the holiday of a lifetime.
Given that the second half of the year often sees an uptick in completions, it’s not unreasonable to think that 2019 might be another record-breaking year for the equity release market. And this is where advisers are crucial for realising this potential expansion in the equity release market.
But, of course, advisers don’t operate in a vacuum. Research we carried out earlier this year found advisers ranked getting more support as the number one thing needed to make equity release more attractive and accessible in 2019.
Without this help, advisers would struggle to meet customer demands, which will have a negative impact on the industry.