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Equity release finding favour again

Equity release finding favour again

Category: Retirement

Updated: 12/12/2012
First Published: 18/10/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The number of people looking to release equity from their homes registered a sizeable jump in the third quarter of this year.

Members of the equity release trade body SHIP made new advances of £206.2 million in Q3 2011, up 12% on the previous quarter (£184.9 million), and the highest level of lending seen since Q1 2010 (£213.4 million).

The number of equity release customers also grew by over 10% from 3,710 (Q2) to 4,148 (Q3).

SHIP said the growth represented 'excellent news' for the equity release industry, and showed that consumers are becoming increasingly aware of the benefits of 'accessing the money tied up in their home, to help them have a more comfortable retirement'.

This increased awareness among consumers was led by the adviser market, with intermediaries accounting for 88% (£181 million) of new business and 12% (£25 million) of customers buying equity release direct from a provider.

"The latest equity release figures from SHIP revealing a rise in customer numbers and a considerable increase in lending suggest that the sector is moving in the right direction after what has been a challenging couple of years," said Richard Eagling, editor of Investment Life & Pensions Moneyfacts.

"The increase in demand for equity release comes at a time when greater numbers of elderly homeowners are struggling to cope with the rising cost of living.

"Given the extent of the pensions crisis and the fact that many retirees are finding it difficult to fund their retirement, accessing the money tied up in their home is the only sensible choice left.

"With the baby boomer generation now hitting retirement we are likely to see even more individuals embrace equity release as an alternative means of providing income in retirement."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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