At its equity release round table to celebrate its 10th anniversary in the sector, NU called for the Government to become actively engaged in the market and work to educate consumers as to the benefits these products offer for retirement income and care funding.
NU head of marketing, post retirement Anthony Rafferty said: “We can certainly see the Government becoming more involved in this sector – potentially underwriting the no-negative equity guarantee offered by SHIP members and working with providers, intermediaries and consumer groups to boost take up of this product.”
This comment was backed up by Key Retirement Solutions business development manager Dean Mirfin who said that through his work with key influencers, he believes: “The Government certainly has an appetite to become involved in this sector but how is the question?”
Help the Aged special adviser Mervyn Kohler highlighted the fact that “Government policy is used to encourage consumers to do the things they want them to do and a key issue is currently funding social care. If the sector can show how equity release can solve this problem then I believe there is a real chance they will become involved.”
The round table agreed that equity release would become a ‘standard’ part of retirement planning. However, they also said that while equity release could certainly form part of the solution to the pensions’ crisis, it was not the only solution.
NU product manager, equity release Dominic Fraser-Smith said: “Many consumers have no pension, high levels of personal debt and will face substantial pensioner inflation so I definitely see equity release becoming a standard and important component of retirement planning in the future.”
The debate concluded with panellists offering their views as to how the market would grow in the next ten years. All agreed there would be significant growth: NU foresaw that sales could double to £2.4bn over five years.
Premier Mortgage Services managing director John Malone supported this view. He said: “By 2020, there will be a major problem in pensions and equity release will help to bridge this gap. I also see it playing a key part in financing long term care in the next five to ten years.”