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Just Retirement predicts dire future for wholesale funded equity release providers

Equity release players which fund new business through wholesale funding are unlikely to have a future, according to Just Retirement.

The firm, which announced impressive fourth quarter sales figures today, claims that banks and building societies or equity release providers backed by such organisations will be unable to continue writing new business relying on short-term funding.

The news comes after In Retirement went into administration earlier this week. Firms such as Bradford & Bingley, Standard Life bank and Bristol & West, all of which used wholesale markets to fund new business, pulled out of the equity release market last year.

Chief executive Mike Fuller says: “What it does say is that increasingly there is recognition that the funding logically comes from life assurance companies as an investment of their annuity books which is the model that we pioneered. I do not see banks and building societies coming back into this market. It does not make sense.

“The point here is that it might be called a mortgage but it is a life assurance policy. It is not a product that makes sense from a wholesale funding view point. We have cash flows which work the other way on our annuity business so it is a natural hedge for a significant annuity player. I do not expect those businesses to have much of a future. Our logic is that I do not see them being permanent significant payers in the equity release market.”


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  1. Just Retirement predicts dire future for wholesale funded equity release providers
    The article states that Just Retirement pioneered using equity release to back annuities but suely it was Hodge Life and Zurich (Allied Dunbar) that first used equity release products to back annuity policies.

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