2013 proved to be a record-breaking year for the equity release market with the total amount of funds released breaking through the £1 billion barrier, figures from Key Retirement Solutions show. In fact, their Equity Release Market Monitor revealed that the total amount of funds released climbed to £1.060 billion – 10% higher than 2012's figure of £961.41 million.
It was the third year of successive growth and confirmed industry expectations of the £1 billion threshold being hit by the end of the year, taking the market back to pre-financial crisis levels for the first time. As would be expected the amount of plan sales increased accordingly – sales were up 3% over the year to reach 20,331 with the average customer releasing £56,045, an increase of 7% on the previous year.
The figures highlight the growing confidence in using property wealth to help fund retirement, with the amounts released generally being used in order to improve standards of living. Home and garden improvements remained the most popular use of funds (58% of those surveyed used funds for this purpose), while the number of customers that used the money to clear mortgages rose to 21%.
"Confidence in using equity release and property wealth as part of retirement planning has grown substantially, as demonstrated by the rise in average amounts released, [being] driven by the market's focus on developing products which are specifically designed to provide solutions to issues retired homeowners are facing.
"However, the strength of the property market is also highlighting the wealth many people have in their homes and how it can be used to tackle issues with retirement income as the wider economic recovery boosts confidence and optimism."
Unlock a proportion of the value – or equity – you have in your home in exchange for a tax free lump sum
Key Retirement Solutions UK Equity Release Market Monitor 2013 Review
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