Anyone who has been keeping tabs on the equity release market in recent months will be aware that 2014 was a bumper year for this sector. Indeed, it broke through the £1 billion barrier by the end of September. It was further expected to reach the £1.2 billion mark by the time New Year’s Eve was over and done with.
However experts within the sector are now stating that 2015 could be even better than this. According to recent figures some 70% of advisers in this field were confident the market would expand further during the last quarter of 2014 and the first of 2015. The research, undertaken by Bower Retirement Services, notes that the percentage of 70% of equity release advisers is up from 60% seen in the third quarter of 2014.
There is also a belief that the market could well expand to reach double its current size. There is certainly no indication that the trend will continue to go anywhere but up, ensuring that the market is likely to continue moving in a positive direction.
Changing attitudes to inheritances
In the past it was often assumed children would inherit money and property from their parents upon their death. However things have changed markedly since then. In reality, changes to pensions and an ever-increasing cost of living has led many retired people to consider whether equity release might be the best move to make. It is certainly very unlikely nowadays to receive a final salary pension, which has severely cut the amount of money many people would receive when they retire.
In essence a number of factors have led many retired people (and those who are due to retire) to consider whether taking money out of their property might be a good alternative. It does not necessarily get rid of an inheritance entirely, but rather diminishes it and still enables the older homeowner to enjoy a secure retirement that is free from financial worries.
73% still talk to family members before making a decision
Despite the sea-change in the way older people view inheritances, they are still talking to their family members prior to making a decision on whether equity release is right for them or not. As such they are fully informed and able to discuss the issue of finances and inheritances prior to deciding what to do. This is not a decision that should be taken lightly and it is heartening to know it is made only after much thought and discussion.
In any event, it will be intriguing to see how much bigger the market does get in 2015. After an excellent year last year (and in particular a strong finish) equity release shows no signs of abating or weakening in popularity. Indeed, if truth be told nothing could be further from the truth. In a few months’ from now, we could be approaching the £2 billion mark for this year. Now there’s a thought.