New research from Canada Life reveals that almost three quarters (72%) of financial advisers expect the equity release market to grow next year, with a fifth believing it could increase to more than £6bn in value.
Only 42% of advisers saw growth in their equity release book during 2020, as the global pandemic took hold.
But they expect the market to rebound quickly, with 62% expecting the market to return to pre-COVID levels by Q2 2021 and surpass them by the end of the year.
Advisers believe that alongside this growth the market will change over the next 12 months; more than half (57%) of those polled think the average customer age will get younger and 45% believe the size of loans will increase.
The way clients are using the funds is set to change too; 70% expect funds to be given to children or grandchildren in 2021 which is an increase from 60% during 2020, and 65% think funds will be used to pay off debts – down from 71% in 2020.
The main drivers of demand for equity release in 2021 will include increased awareness and comfort with equity release among homeowners (59%) and the impact of COVID-19 on family finances (58%) according to the research.
Alice Watson, head of marketing, insurance at Canada Life, said: “There is no doubt 2020 has been challenging for many reasons, but it is great to see so much positivity looking forward to next year.
“Advisers are clearly anticipating a growth in demand driven by both improved awareness of equity release and families reassessing their finances in light of the pandemic.
“Predictions around a shift in customer age and increase in loan size, point to a move in how homeowners view their home as a financial asset much like pensions or ISAs.
“The world is changing around us, but closer to home we need to consider how best to use our overall wealth to provide the secure financial futures we seek.
“Advisers are best placed to show clients how to plan for that future.”