Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • April 2018
04

Equity release lending doubles in two years

Open-access content Thursday 19th April 2018 — updated 5.50pm, Wednesday 29th April 2020

Lending activity in the UK equity release market hit a record £870m in the first quarter of 2018 – 120% more than the £394m registered in the first three months of 2016.

2

That is according to figures from the Equity Release Council, which reveal that the over-55s unlocked nearly £10m of housing wealth every day between January and March this year.

That is more than double the £4.2m released daily in the first quarter of 2016, with the council's chairman, David Burrowes, saying more people are turning to alternative forms of finance to fund retirement.

"While pensioners' income is on the rise, a potential over-reliance on private pensions could lead to a retirement income shortfall in the future," he explained.

"New sources of income in later life are increasingly being sought, and this highlights the need for a rounded approach to retirement planning which considers all wealth, assets and product choices."

The increase in demand is reflected in the number of new equity release customers almost doubling from 5,175 in the first quarter of 2016 to 10,195 in the first three months of this year.

This has been met by a rise in the number of product options available to customers, which grew from 69 in January 2017 to 86 one year later.

It was also found that competition has driven greater innovation, with over two-thirds of product options now offering customers the choice to make ad-hoc, penalty-free voluntary or partial repayments of their loan.

Drawdown lifetime mortgages continue to be the most popular product choice, with two in three customers opting for this arrangement.

These allow for smaller amounts of housing equity withdrawn initially, with an extra amount reserved for future use - limiting the interest owed as it is only charged as funds are removed.

New customers that agreed to these plans withdrew an average of £64,797 in equity in the first three months of this year, 4% more than in the previous quarter, and an 11% rise year-on-year.

"Equity release provides financial help for consumers in a wide range of circumstances, including some wanting to make home improvements or fund social care needs," Burrowes said.

"Given that nearly 70% of all homeowner equity belongs to households aged 55 and over, it is inevitable that housing wealth will also be used to help get the next generation on the housing ladder."


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our April 2018 issue of The Actuary.
Click here to view this issue
Filed in
04

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Life Actuarial Trainee

England
Up to £55000.00 per annum
Reference
145815

Catastrophe Manager - Top Performing Syndicate

England, London
£70000 - £94000 per annum
Reference
145814

Senior Pricing Analyst

London, England
£40000 - £80000 per annum
Reference
145813
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ