When do we take risks and get experimental? Usually when we’re either confident or desperate, right? In business especially, rolling the dice is almost always a sign that times are hard or things are progressing nicely. So, for equity release, where are we in 2019? Down or up?
Well, I would say that it would be pretty hard to make an argument that we are in hard times. Our record-breaking 2018 has reminded people that we are here to stay. But, beyond pure numbers, signs are even more positive as our lenders are confident enough to try something new. A sure sign that we are on the up.
Just Group are one such lender that feel bold enough to take a risk and launch a fresh product – the Just For You Lifetime Mortgage. This comes off the back of SAGA’s recent launch, Legal & General continuing their industry-leading push, and many other lenders trying something new, and I applaud their confidence.
The new product will reward customers who pay more interest per month with a discount on their overall rate – something truly original. But Just haven’t stopped there, they have also included the option to take a three month payment holiday each year, giving customers even more flexibility. Now, other lenders have payment holidays built into their products, but few have gone on to offer the added levels of flexibility that Just Group have.
For example, the new product also goes further than any other on the market when it comes to overpayments. Rather than the previous industry best of four per year, this new lifetime mortgage will allow customers to make a hefty six overpayments of up to 10% each year. So, they aren’t playing around here.
Ultimately, Just Group’s new lifetime mortgage is another sign that equity release is improving every single day and offering customers what they need – choice. As we move through 2019, I would love to see more lenders follow their lead and try something new. After all, we have taken this industry into a comfortable position in recent years, so we can now roll the dice together.
However, despite equity release doubling in size in the last three years alone, and bold new products like these being launched, we cannot rest on our laurels. Product launches like these are exciting and prove that the lifetime mortgage as a whole is in a strong position, but there are still challenges ahead. For example, as the complexity of our products grows, as does the necessity of having incredibly skilled and knowledgeable advisers available to all our customers.
If we are going to set more records this year, we need to ensure that we are all keeping up. Our customers deserve the best advice possible, so remaining on top of every new product launch is key. What’s more, with equity release set to continue its growth, Just Group will definitely not be the last lender to try something different. So, we need to make sure that we remain switched on and following the industry closely.
I know this is true for most advisers I have met and dealt with, but what about the new advisers we need to grow equity release even further? These new advisers need to quickly understand this growing, yet ever-evolving, market; every new product needs to be watched carefully by those considering getting involved with equity release, as only a full understanding of every option will allow them to become the skilled adviser we need.
Overall, every new product launch is something to be celebrated, as this will give our customers (and advisers) more to choose from. But new products that really shake things up and take a risk are what solidifies equity release as a serious part of retirement finance. And yet, no matter how many new products we see in 2019, advisers and everyone involved in this industry need to keep abreast of every launch, recognising the development in the products and how they will appeal to a larger audience. Equity release is evolving and recognising this is essential.
Andrea Rozario is chief corporate officer at Bower Retirement