Its latest equity release IFA confidence index found 82 per cent of IFAs surveyed stated that up to ten per cent of their equity release business came from clients using the product for retirement income and 18 per cent indicated that this percentage was far greater. It also found that more than 80 per cent of IFAs expect to see an increase in equity release business over the next three months.
However, Hodge says this predicted growth in interest is coupled with the requirement for tailored advice. Effects upon state benefits, the length of drawdown facilities and interest rates continued to rank as first for importance by IFAs, it says.
Hodge Lifetime managing director Jon King says: “The recession continues to stretch people’s finances and older homeowners have been some of the worst affected by rising costs of living and reducing returns from savings. It is therefore, unsurprising that the number of people using equity release specifically to supplement their retirement has seen a marked increase over the past two months.
“Equity release can offer a real solution for older homeowners and the fact that this is being identified is encouraging. However, the importance now rests on the quality of advice they receive. As business is expected to increase, IFAs must ensure all product specifications and implications of these plans are covered with prospective clients at the outset – particularly in respect of redemption penalties.”