Partnership is set to move back into the equity-release market, claiming it is “a logical” step for the business.
The enhanced annuity and long-term care provider will use its annuity book to back lending, like its rival Just Retirement. The firm pulled out of lifetime mortgages in May 2008 and home reversion in February 2009.
Managing director of retirement Andrew Megson, who was previously sales director at Just Retirement, says: “We are very interested in equity release. It is a logical step for us. There is a massive customer need there but the market has fallen because there is not the supply. We need new entrants as well as product innovation and distribution also needs to grow.”
Just Retirement, Aviva and LV= are the major players still competing in the sector after Stonehaven last month became the latest in a long line of providers to suspend equity-release lending.
Money Marketing first revealed Prudential’s decision to pull out of the market in November 2009, which followed Northern Rock, Saffron Building Society, Coventry Building Society and Retirement Plus which all previously suspended lending. In Retirement Services went into administration early last year. Lenders relying on wholesale funding without an annuity book have been worst hit.
A Just Retirement spokesman says: “This is good news. We are all about educating the consumer and the more competition the more education and the bigger the market can grow.”
Independent Equity Release Adviser Alliance spokesman and IFA Dermot Brannigan says: “Prudential had annuity backing and look at them but then I am not entirely sure Prudential were that committed to the market and I do think that funding model works.
“I would fully expect Partnership to use its experience with the enhanced annuities that they offer to bring something forward that is different. I imagine they will be in it for the long haul.”