The broker’s report into equity release lending in Q3 2009 shows that the total number of plans were up 19 per cent to 6,123 from 5,143 in Q2.
The total amount released also increased by 13% to £214m, up from £188.9m in Q2. KRS says that while overall lending has increased the average loan has fallen by 4 per cent over three months, with drawdown representing 65 per cent of all plans, resulting in lower initial advances because clients hold funds in reserve for later rather than taking them now.
The report also found that debt and mortgage repayment has increased in popularity increasing to 36 and 23 percent respectively.
KRS group director Dean Mirfin says: “The continued growth in the number and value of plans throughout 2009 is very encouraging. Pensioners are hard hit by the current climate, experiencing higher rates of inflation and previously unknown low levels of returns on their savings, as a result equity release is providing a strong support for those who want to maintain a good quality of life in retirement. We expect the last quarter of the year to be equally strong as more confidence emerges.”
Mirfin acknowledges that several providers have pulled out of the market, but he expects that a number will soon return, “stronger and wiser”.
He says: “The demand for greater income or capital in retirement is continuing to grow and as a result equity release has to be a serious consideration for anyone who wishes to boost their provision in, or approaching, their retirement.”