The equity release market is on the cusp of a revolution with the market set to double in size in the next five years, delegates at Professional Adviser’s annual conference heard.
Equity release experts agreed it was important to educate both clients and advisers about the growing lifetime mortgage market and it would continue to expand as more people looked to property as a way to fund retirement.
Speaking at PA360, Aviva UK head of savings and retirement Alistair McQueen said making pension saving stretch as people lived longer after retiring was a growing challenge.
He added: “We are all having to look beyond core pension wealth. The second biggest source of wealth for many in the UK is property and these products [equity release] must be brought to the table.
“Aviva see this market as only going in one direction – of growing in years to come.”
Other panellists, LV= equity release strategic sales manager Georgina Oxton and Pure Retirement head of distribution Chris Flowers agreed the market was expanding rapidly and more education on available options was needed.
Panellists were asked how the rapid growth in the market would cope with potential mis-selling, they said it was already a highly regulated market and had been since 2004.
McQueen said Aviva was a large, long-standing insurer with a good reputation and conscious of any risk to that. However, he added: “Customers want this product and increasingly seem to need it.
“I think this debate is coming to the end. The market has moved on.”
Flowers added that the equity release transaction was the only financial services product which had the full involvement of a solicitor which oversees the understanding of the client before the deal goes through.
He added that just because equity release clients are mainly over 75 it doesn’t automatically mean they are vulnerable.
Oxton added: “We all take out responsibilities to our customers very seriously. Solicitors provide a very valuable protection.”