Equity Release

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March 2008

Equity Release Roundtable

Changing perceptions

Helen Morrissey talks to a panel of experts about how they expect the equity release market to develop

Helen Morrissey: Welcome to the Retirement Planner equity release roundtable. Patterns of retirement are changing and as they change there's an increasing role for equity release. We're seeing a pattern where more people enter their retirement years with outstanding mortgages and debt on their credit cards etc. How can equity release help people to manage their situation?

Roger Hillier: One of the aspects that is really evolving is how people are using the money they receive from equity release. If you look back at how the money was being used, say, ten years ago and what's happening today, there are some differences. People are using a lot of the money, not all of it, but some of it, for repaying existing debts. I think that says quite a lot about what is happening with people's personal finances.

Andrea Rozario: I think that the attitude to debt is vastly different now compared to what it was. So we're seeing more and more people in debt and equity release can be a viable option.

Georgina Smith: I'd support what Roger was saying. About 50% of mortgages that we sell have a loan to be cleared. However, as Roger says, the money people get from equity release is not only being used to clear the debt, they're using it for other things as well. However, the primary reason is to come and clear that mortgage that they don't want to pay any more or can't afford to pay.

Simon Smith: I think a lot of people are entering retirement in debt and a lot of that was to do with the fact that mortgages haven't really been properly ... what's the word I'm looking for ...

Andrea: Advised?

Simon Smith: ... they didn't come within the realms of the Financial Services Act. Banks and building societies really weren't interested whether people could afford them after retirement date, they just set a time limit, or no time limit at all, without asking the question. That shouldn't happen with the way things are being done now, so maybe there won't be so much of it in the future.

David Wright: I think equity release will get bigger and bigger. I think a time-bomb that is waiting to happen is endowment mortgages. I don't just mean the shortfalls, I mean the people who have surrendered them and then done absolutely nothing. Now they have an interest-only mortgage and they're going to get to a point where the lender says 'Well the 25 years is up, what are you doing?' and they won't have a clue what happens next. I think there's worse to come.

Andrea: It's children's debt as well though, isn't it, which I think is even worse. That's where you've got to be extremely careful, because the benefit is not necessarily for the actual consumer.

Simon Little: We're witnessing a cultural shift in attitude to debt and how individuals view property which we're only just beginning to see play out. If I had £1 for every time I either read or heard somebody say "They see their property as their pension over the last 10 years?" I'd be a wealthy person. Something like 25% of all new mortgages transacted over the past year, were interest-only in some shape or form. Clearly some of those people are banking on house prices accelerating over the next 20 or 25 years with a view to downsizing in order to release a lot of equity. If that doesn't happen to the degree that they envisaged then what other options have they got? Equity release is going to be a vehicle that will help many of these individuals manage their debt through into retirement. So I think we're seeing some quite interesting dynamics which will play out over the next 10 years.

Roger: I see equity release becoming a bit of a 'get out of jail card' for many people. Yes, there's a lot of money being passed on to children, they'll inherit that and that will help them get on the property ladder but what happens then? I just think with my own children, one day they'll probably be buying a property and they'll probably get some sort of small deposit I imagine from me but what's going to happen with their children?

Andrea: The problem is we just never know what's round the corner do we, especially with house prices. Nobody expected the house prices to increase quite so much over the last decade, I certainly didn't.

Helen: Okay we've been focusing mainly on the debt aspect of equity release, but there are other ways that equity release can be used. I'm thinking in particular of things like IHT planning and pension top ups. How can we see these new ways of using equity release developing?

David: I think there needs to be a bit more openness if that's going to become mainstream. I think there are IFAs out there doing exactly what you've just described, but because they've come up with this strategy they're quite understandably keeping it to themselves. None of the product providers seem to have anything really concrete to say on the subject. I know Stonehaven's come out with some useful little fliers on both those subjects, but not with any enormous detail of how to go about it. Having been an IFA for a long period of time, whenever I hear of any moderately good idea, the thing that's always on your mind is compliance and how do you put it across in a compliant manner.

It can be very frustrating that we're all inventing a wheel individually. If we could get together and determine the best way of doing things, with the help of compliance people and so on, then that's got to be a major untapped part of the market.

Georgina: What you would start to see is equity release being used as a sensible thing to do when you're looking at your retirement planning. We're seeing a lot of growth coming from IFAs, the financial planners that are now using equity release alongside pensions and investments, and therefore now using the property as part of the retirement planning process.

That to me is a really good use of equity release and it may remove some of the stigma that's associated with equity release at the moment, because consumers are making educated positive choices about how to use their property alongside pensions and investments.

Simon Little: There is an educational need here, and the starting point for this is to educate consumers to begin to see their property as an asset, just as you would your pension fund. If that becomes more mainstream thinking, then companies will develop tools and the systems and implement the compliance rigour to support this thinking, to say to people 'you've got these two/three, asset pools, for example their accumulated pension fund, savings and of course the value of their property'. For most people it would be what's tied up in their property is their largest asset on retirement and the question is, 'How do I access that and what are you going to do with that?'

David: Another barrier of course is there are inheritance tax (IHT) specialist IFAs out there who don't believe in equity release.

Georgina: Because they don't understand it.

Andrea: The actual concept of equity release is reasonably easy to work out. It's the advisers who have specialised in equity release that can utilise equity release and inheritance tax to ensure that their clients are making the most out of their estates. What we've got to do is to get the FSA to understand that.

David: There's a reason why the inheritance tax part of equity release is a small part, and that's because of a lack of understanding and fear of compliance. It can be a lot bigger.

Roger: Certainly in inheritance tax there's a general lack of market awareness anyway. If you look at how many people actually make inheritance tax planning provision, I would've thought it was a very small percentage. So there is significant potential to include equity release in the raft of possible inheritance tax product solutions.

David: There must be an awful lot of those people who will come into the category of high net worth but don't have sufficient sums of cash to pass on. They might have a million pound house and a £100,000 in the bank, but they can't afford to give it away. Equity release can provide funds for tax efficient investment or gifting.

Simon Smith: I want to go back to the idea of using it for pensions, because on the face of it that sounds absolutely fantastic. However, I've run some calculations up there and you're looking for a very specific person to do that. For one, it really doesn't make any sense unless they're a 40% tax payer, so you've got to be a substantial 40% tax-payer to do an equity release to get that much cash put into your pension plan. You've got to be a big old earner and if he's a big old earner he's probably been stashing it away for years.

Andrea: I think the larger markets are the people that want to utilise equity release on an ad hoc basis or a draw-down basis. They want to supplement their income, or they want to help their children and their relatives, or they want to just improve their lifestyle. That's the larger end of the market.

Simon Smith: Yes, but Simon's right in as much as you've got to treat your home as just another asset class and that's the key to it. Once you see it as just an asset and not as something that you've fallen in love with, it becomes clear.

Simon Little: I think you're right, and I don't think we're there yet. We haven't uncoupled the emotional tie to properties that we have in this country. But that's where we're heading increasingly you hear the phrase 'the kids have spent my income, I'm going to spend their inheritance', being used and we are seeing a really different attitude to retirement which in part is being driven by the baby boomers that are just coming up to retirement.

Andrea: I was talking to an adviser the other day and I asked him if he dealt with equity release. He said no and when I asked him why he said, 'I don't agree with it.'

Simon: Because?

Andrea: 'Why don't you agree with it?', 'Just don't', 'But why?, 'Just don't'. That to me is so frustrating, because that is him imposing his feelings onto his customers. He's removing a choice from his customers because he doesn't believe in equity release, and that should not be allowed.

Simon Smith: I've got a case right now, where a 73 year old woman needs to do equity release to keep her home, and the solicitor is writing her a letter to say that she's doing the wrong thing and that she should go into an old people's home.

David: She's 73?

Simon Smith: Yes.

David: Reasonable health?

Simon Smith: Yes.

Andrea: He's getting into realms that he shouldn't be getting into.

Simon Smith: Oh absolutely, I've made it perfectly plain to my client that he shouldn't be giving her that kind of financial advice. I'm also going to be telling him that.

Roger: I think one of the things we should mention is the biggest single reason people use equity release is to improve or adapt their home. This indicates they want to maintain it as their main residence and continue living in it for as long as possible. This should be reassuring for product providers - as enhanced properties will maintain or improve their relative market value.

Andrea: The other thing is care in the home. I think care in the home is going to be a large part of the market going forward, because as we're living longer it's inevitable that we're going to have more people in ill health for longer. If you have the option of staying in your own home rather than moving into what's currently available with retirement homes etc, I think the majority of people would prefer to stay at home.

Simon Smith: It could well be a much cheaper option too and better for a lot of people.

Helen: Do you think if there was more emphasis on the positive aspects of equity release that it would be more popular?

Roger: I feel it's dangerous to advertise the holiday aspect of it ...

Andrea: Well I disagree with that because what we're doing then is we're pigeon-holing people and we're putting them into this category of they're not responsible for making their own decisions.

Simon Smith: I do a lot of advertising and I just would feel uncomfortable if I say 'do this and have a cruise of a lifetime'.

Mike Lewis: It needs to be a balanced view, doesn't it?

Andrea: It has got to be a balanced view, yes, but I don't think it's for us to determine and to tell people what they should do with their money.

Roger: We've got one lovely story of a customer that wanted to borrow about £15,000 to buy a camper van to go round Europe. Providing all the alternative funding sources have been explored, why shouldn't a customer release equity to spend as they choose?

Georgina: Our average age is 62, they're not vulnerable, they're not senile, they're 62 year olds. It's all about making informed decisions about how they want to live their retirement.

Roger: It's interesting, an average age of 62, that's a lot lower than I'd expect.

Georgina: It is, well because we were the first to launch at 55, we picked up a lot of that backlog in the early days, so the book may get older over time. We also see younger clients selecting to pay the interest while say one of them is still working.

Roger: It's a bit worrying in some ways that that average age is coming right down.

Georgina: These people are used to debt, they're less inclined to want to leave an inheritance and they are fully informed in their decision-making

Andrea: We're back to people being able to make informed decisions, they've got to be able to satisfy their existing needs, but keep an eye on the future. We don't know how long we're going to live so it's balancing that up with the responsible attitude.

Helen: I know the numbers of people using equity release is growing, but I still think a lot of people are remaining hesitant. I remember going to a roundtable, and Jayne Almond from Stonehaven was saying that she doesn't see why the equity release market shouldn't be ten times the size it is. I was wondering why you think people remain hesitant.

David: Personally I think it's almost all reputation. There may be the odd solicitor and the odd IFA who's got a bee in their bonnet about it and try to talk people out of it, but I don't think they're the big problem. I think the biggest problem is that people read things about it in the paper and that puts them off even speaking to anybody about it.

Simon Little: I think we're about to enter a bit of a golden period for equity release. If you consider that the sub-prime market has all but dried up and the likelihood is the buy-to let market will follow. With two big markets like this no longer providing the source of income for IFAs and lenders that they once did then they will need to look to other markets with real growth potential to move into. Equity release has to be one of these markets. Equity release is here and waiting for IFAs to move into.

Georgina: We did some research among advisers at the back end of last year when the credit crisis was just kicking in. 14% said that they absolutely had to get equity release on the agenda this year because of the big shortfall that they're going to see from sub-prime and even mainstream mortgages. In terms of consumers, they will try and put a rational reason on why they're not doing equity release. When you get under the skin of it it's just pure emotional 'I'm a bit scared of losing control over my property, I'm a bit scared of what will happen in 20 years'. It's emotional reassurance they need, and that's the role of SHIP, isn't it, in terms of you've got to reassure them and educate them.

Andrea: Yes, what they don't know is the flexibility available. They don't know the types of products that are available, and this goes for advisers as well. They don't know the safeguards that are in place. They understand it's there, but they don't understand the mechanics. If advisers and the legal profession, for instance, took an interest and did a bit of research and looked more into the market, then it would dispel a lot of the myths that surround equity release. I think SHIP's got a big role to play in that, because we need to get the messages out clear and simple.

Georgina: Yes, just the statement 'We will never repossess your property' in a market where house prices are beginning to cool off, where people are being made redundant, that kind of thing. The fact that 'We will never repossess their property' is a massive statement and people aren't aware of that. They're not aware that that guarantee is in place.

Roger: That comes back to completing the loop; individual customers need to know who to go to to obtain specialist advice on equity release. The industry would benefit from an easy to access central reference point or register of qualified equity release advisers.

Mike: We're finding there are a lot of IFAs out there that don't deal in equity release and don't know who to send it to. We have to educate the brokers to know where to turn to for the right advice and then they can pass it on for IHT planning or for any other need.

Roger: Going back to the point Simon made on this year's mortgage market. Buy to let volume's are going to be down, residential volumes of remortgaging is going to be down, so the market will shrink in total lending terms by perhaps up to 25%. Roughly speaking, this means all brokers will either lose 25% of their business, and many will go out of business, unless they turn to other market sectors. Equity release is a sector well worth consideration.

Georgina: I know, and all of these things are down, and yet consumer need isn't going away. There's still customers out there who need money, it's just their options are becoming less and less.

Simon Smith: I'm a typical consumer, in some respects, because I've got an empty nest at home. I've got a biggish house, there's just the two of us rattling around in it, and I always thought I would trade down, put some money in the bank. But no, I don't want to do that, I like the house, like where I am, and the space isn't too much of a problem. So I'm going to stay.

David: This whole issue of downsizing is over-stated, in my opinion. What does it actually cost to downsize? It depends on the part of the country but a house move in the south-east is going to cost £20,000 and that's ignoring the emotional upheaval on somebody in their 60s or 70s.

Helen: If we can just move on to the role of SHIP and how that's going to play out over the coming months. Obviously, the profile of SHIP has grown in recent years and we've got Andrea here as director general of SHIP so we should really talk about what role SHIP's going to play in the equity release market in the coming years.

Andrea: I think what SHIP has already achieved in connection with the widespread recognition of the brand is fantastic. I think that in the future what we will be looking to do is to grow the market safely. We want people to think of equity release as a logical decumulation product and to have confidence in releasing the equity for whatever reason they want. SHIP's role is to bring it into the 21st century, if you like. It's to educate, to inform, to give confidence to the consumer and create an environment where equity release will flourish. To do that we've got to go right across the board from bringing the regulator up to date, letting them understand how equity release works and ensuring they're aware that the members of SHIP are subscribing to a code of conduct that is over and above pure regulation. It's differentiating members of SHIP to outsiders and putting SHIP up as a strong trade organisation that has a single voice for equity release.

Helen: You were talking about educating the consumer. What's the best way to make sure that you actually talk to the consumer and build their knowledge of equity release?Andrea: One of the things we've got to do is put SHIP at the front of everybody's mind, especially from a media perspective. I've seen programmes where they've had supposed experts talking about equity release, and it's evident that they've got no experience, no qualifications and no idea of how equity release works. So we need to make it clear, if the media want quotes and comments on equity release they go to a body such as SHIP to get accurate information.

Simon Smith: Can I ask you, do you feel your role is more important for the industry or for the consumer? I really believe there's a role for SHIP in representing the industry to the government and to the authorities and regulator and everything else, I think that's absolutely right, but does it really mean very much to the consumer to know all these products are regulated?

Andrea: Yes, I think it does mean an awful lot to the consumer, because if we can get Trevor McDonald at the end of one of his scare-story shows to turn round and say 'If you're going to take equity release, then look at a provider that's a member of SHIP', then we're in the right direction. What we need to do is be able to build the confidence of the consumer that if they go to a SHIP provider they know they will abide by a code of conduct. Now, if you mentioned SHIP to consumers, I believe, from my experience of having dealt with the consumer that they understand and they know about SHIP, but we can certainly build on that.

Simon Smith: I do a presentation to all of my clients and I've got a whole page of it regarding the SHIP promises and most of them haven't heard of SHIP.

Roger: I wonder where it is that they hear about SHIP, because SHIP does not advertise. Yes it has a website but I'm not sure how the consumer would stumble across it.

Simon Little: I would say that the time has now come to drive this into the consumer. I actually think the consumer will grow this market more than any other group as the pent up demand for this type of solution grows. They're going to be knocking down IFAs' doors over the next five to six years. At the moment, there isn't one source to go to, something like a moneysupermarket.com website where you go and everything you want to know about equity release is there at your finger tips. There isn't any of that and that has to come in this market.

David: I think SHIP needs to have a side to it where brokers can get some sort of accreditation. People go to unbiased.com and look for an IFA that's fine for finding the local sort of corner shop IFA but not a specialist.

Simon Little: One of the reasons why SHIP has appointed Andrea is because it recognises it needs to re-evaluate where it's going and its core objectives.

As a result there are discussions going on along similar lines that you're talking about. There are no decisions made by any stretch of the imagination, but I think that's something that has to seriously be debated and in particular we need to ask ourselves what does it bring to the consumer?

David: Yes, I can't wait for it to happen. I think it's got to happen.

Simon Little: SHIP in its very simplistic form is a kite mark for excellence in this market.

Helen: I think it would be a great thing for people looking for equity release to be able to look for that SHIP accreditation before going somewhere. How do we get consumer awareness of SHIP to such an extent that they will look for SHIP accreditation?

Simon Smith: When people ask me if I'm a member of SHIP I have to say no and give the reasons why I'm not.

Andrea: All I can say to you is that I think your comments are totally valid and as Simon's already said, I think it's something that's certainly on the radar.

Mike: It's going to be a can of worms though isn't it, because who do you accredit and who do you not? What do you have to do to be on the list?

David: Well how does it allow its product provider members to become involved? It's by those that sign up, subscribe to the appropriate guarantees and code of conduct and pay the membership fees. So for IFAs it would be those that subscribe to a code of conduct. So long as the membership fees aren't pegged for the benefit of the four largest companies at the expense of the many smaller firms then it would be great.

Simon Little: I think what you can see just from this very short conversation is that it's not an easy chestnut to crack. However, I think's it's now definitely on the agenda for future discussions, it's great to have your input today, who knows where we'll end up.

Helen: If we move on to the issue of home reversions, obviously they were regulated last year, what kind of impact has this regulation had on the equity release market as a whole?

Mike: I think it's still a small minority. I think really from our point of view there are a lot more flexible products coming on to the market, which has probably grown the market in that sense. I think again house price inflation will have a major impact on future advice. If you go below the 3% mark, suddenly home reversions become quite a serious option to look at. There's every indication that there are going to be tougher years coming ahead. I think it is a market that will grow now regulations have kicked in and there is more competition within that market as well.

David: It's a minor part of the market at the moment and will continue to be until, or unless, people seriously do say, as part of the fact finding process that they think house prices are going to stagnate or even fall. If they think that in the long term, then yes, a home reversion makes good sense.

Simon Smith: I do quite a lot of them and regulation hasn't made much difference to the percentages that I do. I advise on an individual basis and if it was a good idea two years ago then it's still a good idea. I don't think regulation has made much difference. I mean it makes people happier about it, but it hasn't changed my advice for those I consider to be right for reversion schemes.

David: I agree. Regulation hasn't changed my view on it.

Simon Smith: It just gets my goat a little bit when people don't even consider it as a possibility. If you're not considering it within the mix then I don't think you're doing a proper adviser's role.

Mike Lewis: Yes, that's part of the process; I think that's where the specialised brokers and advisers can really add value. I would question whether new IFAs coming into the market have got that expertise.

Simon Little: Regulation has helped because it's put the two products on to the same playing field now. We've got to, as an industry, educate advisers generally on what the products do, how they fit into the market and how they benefit consumers. We talked about IHT planning earlier and I'd actually argue that in the majority of IHT cases a reversion product will probably end up being a better solution than a lifetime mortgage. If we're not careful there is a danger that mis-selling could come from the over-exuberance of advising purely on lifetime mortgages as the only solution. Let's not forget it was only in 1998 that 80% of this market was home reversion. It's only since the big brands - Norwich Unions and others - have come into the market with lifetime mortgage promotions only that the pendulum has swung the other way. I accept that lifetime mortgages are more recognisable from a client's perspective; I think it's also generally easier to sell and advise on from an adviser's perspective. Home reversions can be a harder sell because you're not just selling the product and what it can do for them, you're also educating them in the benefits of why they should be selling the house, and that's a difficult one. However, the end result could actually be better for the client in terms of what they're actually trying to achieve and for this reason we need more advisers educated on the merits of home reversions.

Simon Smith: Certainly in ten years time we could possibly be seeing ten years of house price erosion, many people may want to turn round and ask why they weren't offered the home reversion.

We need to make our clients aware that they can sell at today's prices, lock in at a sale today and accept the percentage they're going to get in relation to their age. You must have had clients that tell you they're not convinced about property prices, it looks terribly top end, you can only see them going down. You've got to be able to say to those people 'Well if you want to sell at today's price, this is the deal I can give you. However, if you want to run with the market, then an equity release mortgage would do that for you'.

Simon Little: Well it's a question of getting the right balance in the market, and I think it's swung too far. I don't ever envisage a 50/50 split between reversions and lifetime mortgages unless products change dramatically. I do think though it should be nearer to 25-30% of the market in terms of home reversion sales. We're now into market conditions that will help that happen. One of the messages that needs to be received is that advisers have until the 1st April to get qualified to advise on home reversions if they want to do business with a SHIP provider. That doesn't just mean sitting a top-up exam if you've got CF7. It means advisers will have to ensure their current permissions allow them to advise on home reversions. There is a real urgency about this and so they've got to act today to hit that deadline.

Helen: What do you see as being the main challenges for equity release throughout 2008 and beyond?

Roger: First challenge is convincing advisers that this is a good sector to enter, and I think that will be helped by what's happening in other markets. So getting advisers in, getting them to consider this sector, getting them qualified. The second challenge is working with the media - looking at Andrea in particular. I'm not talking about the trade press, I think the trade press is on board and very positive about the market and the product providers, but it's the national media, whether it be newspapers or the TV, changing or influencing their view. The third challenge is with the consumers, getting them to look at equity release or consider it more favourably. All three of these challenges are linked. I think those three challenges have always been there, they will be there certainly for this year and they will be there for a long time to come.

Georgina: I completely agree with Roger. As you know, there are many challenges here. However, I do believe that consumers are beginning to become educated and this will improve even further this year. I also believe that more advisers are beginning to enter the market. The key thing here is to hook the two up. Consumers are saying they're not too sure where to go for advice. I think that there is a role for a list for specialist equity release advisers to be made available.

Simon Smith: I see it at unbiased.com all the time. Every IFA in my area lists equity release as an area they deal with. There's nothing I can do about that.

David: Only one client has found us through IFA Promotion, and that's because he was an ex IFA looking for a relative and he was determined to find somebody who was a specialist.

Simon Little: I do believe there is a reasonable pent-up demand for this from the consumer. It's as Georgina says, it's getting stuck in the funnel because people don't know where to go to get proper advice.

Simon Smith: It would be very good for our customers to put them in touch with specialists because they'd be talking to people who knew what they were doing.

Andrea: What will be the main challenges for the industry through 2008? We've also got to consider the rent and leaseback markets and what potential problems there are that are going to be associated with that. It's a case of differentiating SHIP members from those providers. The biggest thing is education, it's getting it to the forefront of people's minds and for people to realise that equity release is not the same as it was ten years ago.

Helen: Does anybody else have any-thing else to add on that point?

Roger: Just on the media coverage, we had the Trevor McDonald programme knocking us back a step, I suppose it was a case of we'd taken a couple of steps forward and then that knocked us back a step. There had also been signs in the national media, certainly in the newspapers on the Saturday or Sunday money supplements that there was more favourable coverage coming through on equity release. I think that comes back to SHIP and each of the product providers, and possibly advisers as well. We need to talk about customers who have actually bought a good product and were pleased with the results. As a group, as an industry, I think we've got a responsibility to get those good news stories out there as much as possible.

Georgina: I think the other challenge that we haven't talked about is one that I think could affect the whole industry and that's of funding. Funding's not as easy as it was this time last year and I think as a result it could stop some of the bigger players coming into the market. It's a shame as when the big names come in, it gives consumers a lot of confidence. I think the industry will have to be slightly more innovative in their thinking in order to survive through 2008, because funding underlies everything we do, and it could be a challenge, depending on your funding arrangements.

Simon Little: I think the major challenge for this year, whether you're an adviser or a provider is to engage more with the consumer and get the consumer to at least discuss this as a suitable option. I think at the moment across all markets the shock factor is setting into the consumer making them come to terms with the fact that the heydays of the last ten years are coming to an end. Now, once they get through that, then equity release is going to be staring many of these people in the face. Funnily enough, with the rise in cost of living that's gone on, you can see that the growth in the industry over the next two or three years is probably going back to helping the needy who haven't got enough money from retirement income to survive. We've had gas prices, electricity prices, food and petrol prices shooting up; all the basic things that one needs to survive have gone up well beyond the level of inflation.

Georgina: I think consumers have been knocked by Northern Rock. Do you get a feeling that consumers are getting more cautious and want to know more about the lenders?

David: I've gone through the sale process with people, come up with a recommendation but they're not a household name. They say 'Oh well what about Pru, what about Norwich Union?', and I say 'Well you wanted these features, one of which is little or no early redemption charges, and they don't fit, so there's a good reason for doing it'. Name awareness does worry people sometimes.

Simon Smith: I don't actually find my selection of plan to be an issue with my clients at all.

David: It depends who it is. If you are recommending a Pru or a Standard Life or a Norwich Union or someone, then the name awareness is there and it is not going to come up. But if it is a Stonehaven or a Hodge then sometimes it does.

Simon Smith: I'd be interested to know what people think is going to happen to mainstream equity release, if house prices really start to fall away.

Simon Little: Even if we had a significant housing crash tomorrow - let's say house prices fell 30% - we'd be back to levels seen around 2003/2004. Even at these levels this will represent significant growth for most homeowners over the past ten years and I seem to recall those years were pretty good years for the equity release market.

David: In 2003 the momentum was upwards, whereas when the momentum is downwards that's a different thing.

Roger: I don't think people are going to put things off, in later life. I don't think they're going to defer putting off their home improvements or money for their holiday or the money for their child's deposit for their first house or repaying the mortgage. So a little dip or stagnation in house prices shouldn't have a significant effect on equity release.

Georgina: As Roger says, that need isn't going away, there is still that consumer need to either get rid of the mortgage, treat the children, make the necessary home improvements and actually because clients don't typically borrow the maximum amount, they're not going to be affected if house prices come off 10-20%. I'm very hopeful, that equity release is a real opportunity for 2008, because, as you say, the demographics speak for themselves. More and more people are becoming eligible for equity release, and actually it's a very good option for them. The choice they've got now is better than they've ever had before, the guarantees are better than they've ever had before and it should be a real opportunity. Fingers crossed.

IFA Profiles

Mike Lewis is the business development manager for Equity Release Solutions

Mike has specialised in the equity release market for some five years previously being the operations manager with NHFA Ltd. His role involves supporting the team of specialist advisers and development of professional business connections for the broker referral service offered by ERS in addition to their direct to public offering.

Andrea Rozario is director general of Safe Home Income Plans (SHIP)

Andrea set up Rozario Harris and Co Ltd an independent, whole of market IFA specialising in the equity release market in 2004. She ran the company until her appointment as director general of SHIP in October 2007. Andrea heads SHIP's management board, and manages the execution of decisions from the main SHIP board. She began working in financial service 15 years ago and is already well known as a knowledgeable and passionate spokesperson for equity release.

Simon Smith is a financial planner at Independent Retirement Strategies

Simon Smith has specialised in retirement planning and equity release for around eight years. He set up Independent Retirement Strategies around five years ago with the specific aim of enabling people to access good quality advice. He believes his customers appreciate having an equity release specialist in the local area rather than having to go via a national IFA or product provider.

David Wright is managing director of Sixty Plus

David has worked in financial services for nearly 20 years and, after spending his formative years working for a major building society, established his own firm in 1995. Following a decade as a general practitioner IFA he decided to specialise in equity release having seen a steady increase in demand for advice.

Sixty Plus has made good progress in working with a growing number of IFA firms who don't want to advise on equity release but instead refer to a specialist.

Provider profiles

- Partnership

Roger Hillier is head of equity release and protection product development at Partnership.

Roger joined Partnership last year with the responsibility for helping to build Partnership's equity release and protection business. Previously Roger was a member of the Mortgage Express product development team. At Mortgage Express he played a leading role in developing their buy to let, self cert, and lifetime mortgage products which became market leaders. Towards the end of last year Roger was a key member of the SHIP working party tasked with appointing the new director general and delivering the new marketing strategy.

About Partnership
Partnership is one of the UK's leading providers of financial products for people with health conditions, delivering innovative financial solutions which are tailored to clients' individual personal circumstances. By taking into account their health Partnership is able to offer the maximum possible benefits to policyholders. Partnership offers a home reversion plan and recently launched the UK's first fully underwritten lifetime mortgage, which allows clients to receive a significantly higher loan to value than a standard provider can usually offer.

- Home & Capital

Simon Little is the business development director of Home & Capital Trust Group Ltd and managing director of Home & Capital Trustee Ltd, the group's product business.

Simon's key responsibilities for the group are to maintain and grow its range of products, primarily their home reversion plans, as well as lead the group's marketing and IFA development strategies. He has been involved in the equity release market for the past five years during which time he has served as a director of Safe Home Income Plans (SHIP). In this role he chaired the Lifetime Mortgage Product Board and led the industries' call for compulsory exams as well as developed the SHIP consumer checklist.

About Home & Capital
Home & Capital is one of the longest established names in the equity release sector. Since the group was founded 30 years ago, it has become a leading provider of home reversion plans and was a founder member of SHIP (Safe Home Income Plans).

The group offers most types of equity release schemes to homeowners, acting either as a specialist adviser or as a product provider.

- Stonehaven

Georgina Smith is sales and marketing director at Stonehaven.

Georgina joined Stonehaven prior to its launch in August 2006. Her first job after university was as a graduate trainee working for ICI Paints covering all aspects of marketing. She then joined Smithkline Beecham as a senior brand manager, before working for Lloyds TSB in brand management and communications for five years. Georgina left Lloyds TSB to join Orange where she was UK brand director.

About Stonehaven
Stonehaven is an award winning specialist equity release provider. It was launched in August 2006 and since then has become one of the leading players in the equity release market.

Stonehaven is regulated by the FSA and is a member of Safe Home Income Plans (SHIP), the industry association for equity release providers.

Stonehaven distributes all its products through intermediaries and was voted Most Innovative Equity Release Product Provider in December 2006. In December 2007 it repeated this achievement, as well being voted Best Technology Provider and Best Lifetime Mortgage Provider.

Stonehaven aims to be at the forefront in terms of designing products to meet individual customers' needs and providing leading edge technology and superior service.