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CML sees potential for equity release

The equity-release market has huge potential for growth, according to research released this week by the CML.

The Market for Equity Release Schemes says with pressure on resources to provide adequate pensions and care for the elderly, the time is right to develop the market.

But the report sounds a note of caution, saying a concerted effort will be needed from parties involved, including lenders, the Government, regulators, IFAs and consumer groups, to take the case for equity release forward.

The CML says older homeowners hold more than £400bn-worth of equity but only just over 1 per cent is being drawn upon to provide an income or to imp-rove their quality of life.

The report says if the right types of products are developed and marketed effectively, older people will start to look more favourably on equity-release products, particularly if the real value of state pensions continues to shrink.

The CML is holding a seminar on November 30 to promote the findings of the report.

Deputy director general Peter Williams says: “The potential for equity release is huge, with room for all lenders. This would ensure competitiveness in the market, to the benefit of consumers. As long as the risks are properly addressed and the limitations clearly explained, the development of suitable equity-release products could enhance the lives of large numbers of older people.”

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