Legal & General is considering plans to enter the equity release market.
L&G Mortgage Club and housing director Stephen Smith says the insurer is considering the move though has no firm plans have been made at this stage. Reports last week had suggested the insurance giant has definite plans to enter the sector.
In an interview with The Telegraph, L&G chief executive Nigel Wilson said the insurer plans to enter the equity release market in the future.
He told the newspaper: “Regulation is clearer now, which should enable us to provide the right good-value products to help grow an undersized but vitally needed market.”
L&G quit the equity release sector in September 2004 when it ended its white-labelling arrangement with Northern Rock.
Key Retirement Solutions director Dean Mirfin says: “More funding is great but you need to bring innovation as well. If it is more of the same that will not be enough to grow the market.
“There are issues around the interest-only problems people are going to face and providers could look at products that could offer a higher loan-to-value.”
Annuity Direct non-executive chairman Alan Higham says: “This is a big reversal in position for L&G. I spoke to their senior management six months ago and they said for the investment it would need and the return they would get from equity release it was not worth the reputational risk.”