Pensions reforms to boost equity release
The equity release provider found that three quarters of advisers (74%) expect demand to increase as more over-55s spend their pension pots and nearly two thirds (64%) think equity release will be the ‘next big financial product’.
Alice Watson, product and communications manager, Stonehaven, said: “We are entering a pension seachange and older homeowners need to consider their home as part of their pension pot to supplement the low interest rates and offset the volatility of drawing too much from their pension fund.
“Equity release is a reassuring solution and flexible products mean that borrowers can still provide a protected legacy for their children, while releasing some cash for themselves to enjoy.
“It’s likely that we will see further uplift in the market over the next 12 months as more people carrying residual mortgage debt through interest-only mortgages look to repay those debts over the coming years.”
Most advisers think people will spend the cash on travel (61%) and their children and grandchildren (48%).
Equity release hit its highest quarterly level for six years in Q3 2014 with a figure of £375.5m, up 15% on the previous quarter according to the Equity Release Council.
Watson added: “With April 2015 pension reforms on the horizon, more advisers will need to become qualified in order to give holistic retirement planning advice.
“Hopefully these reforms while challenging will be the catalyst for more advisers to undertake specialist training.”