Pensions freedoms to boost equity release
Under the freedoms, which officially came into play from yesterday, over-55s have full control over their pensions, while the government has also launched a guidance service called Pension Wise to help them manage their money.
Alice Watson, product and communications manager at Stonehaven, said: “The changes to the retirement income market will completely alter how people assess their wealth in the run up to retirement.
“For many, a significant proportion of their wealth is tied up in their property. With people now encouraged to view their pension pot more flexibly, we could see the same freedom of thought applied to the capital their home can provide.”
The equity release market has achieved strong growth, as there was a 29% increase in lifetime mortgage lending in 2014 (£1.4bn) from 2013, as reported by the Equity Release Council.
Stonehaven research also found that over the last six months more than a third (37%) of its customers tapped into their property wealth to fund home or garden improvements.
A further third (36%) used funds to clear existing mortgages and one in five (20%) use equity release to gift family members.
Watson added: “The market is growing, and this looks set to continue with new, flexible products helping the industry evolve to meet consumer needs.
“It’s now more important than ever for financial advisers to include a client’s property alongside their pension pots and investments when looking at planning for retirement.
“With lifetime mortgages moving into the mainstream, it’s up to us in the industry to demystify the products so that advisers feel better equipped to sell them and consumers better equipped to buy them.”