Our recent research report (Real Retirement Report, summer 2016) paints a compelling picture of the potential role of property wealth in helping to fund retirement and this is something that advisers should look at closely. Amongst home owners over the age of 45:
- 69% say their home is their biggest asset – worth more than their pension, savings and investments put together.
- 46% see their property as a key part of their retirement income planning.
- Nearly three in five (56%) expect to draw on their housing wealth to finance long-term care in later life.
- Almost one in four (23%) of those with mortgages are worried about paying off their loans.
- Almost one in three (31%) have given, or plan to give, money to help a child get on the housing ladder.
For many people, unlocking the potential of their property wealth could not only support their life in retirement but also the needs of their wider family.
Cashing in doesn’t have to mean selling up
Whilst homeowners over 45 may have significant wealth built up in the value of their property, they are also emotionally attached to their biggest asset, with 80% of them wanting to stay in their home for as long as they physically can. However property wealth doesn’t have to be the elephant in the room. Lifetime mortgages, a form of equity release, allow clients to cash in on property wealth without having to sell their home.
Banking on bricks and mortar
With a growing number of homeowners exploring lifetime mortgages, a clear opportunity is opening up for advisers – and it just keeps on growing. Data from the Equity Release Council shows that the second quarter of 2016 saw £514.4m of lending – up a staggering 34% year-on-year. And UK homeowners over the age of 55 withdrew a record £8.2m of housing wealth every single working day from April to June.
Being qualified is just the start of the story
Whether you write business or refer it, don’t let the potential of equity release slip through your fingers.
If you’re already qualified to advise your clients on equity release, the scale of the opportunity is crystal clear. And with most qualified advisers who write business dealing with just four cases or fewer a year, our research points to lucrative potential for further growth.
What’s more, not all qualified advisers intend to continue practicing in this space, highlighting a future gap that will need to be filled as demand grows.
Referrals are a firm foundation for growth
Our research reveals that a quarter of firms don’t have a single adviser qualified in equity release. And 28% of those don’t refer any enquiries elsewhere either, highlighting a valuable opportunity to generate an extra income stream from commissions. To target the right clients for referrals, it’s useful to understand their situation and motivations. Our Lifetime Mortgage hub has all the tools you need to make the most of this opportunity, including referrals best practice guide and equity release customer profiles. Visit aviva.co.uk/adviser/big-opportunity
Roger Marsden, MD Equity Release, Aviva
