Table of Contents
Overview
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- What you need to know
- Scope of this Report
- Equity Release Council
Executive Summary
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- The market
- Equity release sales grew by a third in 2016
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- Figure 1: Sales of equity release products, by volume and value, 2011-16
- Maturity of interest-only mortgages will help equity release sales to kick on
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- Figure 2: Forecast value of new equity release schemes sold, 2011-21
- Companies and brands
- Big three lenders control 85% of the market
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- Figure 3: Equity release market share, by value of new sales, 2015 and 2016
- The consumer
- One in 10 over-45s expect to downsize
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- Figure 4: Expected/actual sources of retirement income, February 2017
- Nearly a quarter of 60-64-year-olds still paying off mortgage
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- Figure 5: Current outstanding debts, February 2017
- Around one in seven weighing up equity release schemes
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- Figure 6: Consideration of equity release schemes, February 2015-February 2017
- Education can help to broaden appeal
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- Figure 7: Attitudes towards equity release, February 2017
- What we think
Issues and Insights
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- The expectation of inheritance is dying out
- The facts
- The implications
- Peer power
- The facts
- The implications
The Market – What You Need to Know
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- Equity release sales grew by a third in 2016
- Mortgage repayments push up plan values
- Equity release buoyed by strong housing market
- 40,000 interest-only mortgages maturing each year
- The pension gaps
Market Size and Forecast
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- Equity release sales grew by a third in 2016
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- Figure 8: Sales of equity release products, by volume and value, 2011-16
- Market forecast
- Maturity of interest-only mortgages will help equity release sales to kick on
- Brexit uncertainty contributing to house price slowdown
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- Figure 9: Forecast value of new equity release schemes sold, 2011-21
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- Figure 10: Forecast volume of new equity release schemes sold, 2011-21
- Figure 11: Forecast value and volume of new equity release schemes sold, 2016-21
- Forecast methodology
Market Segmentation
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- Two in three plans are drawdown
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- Figure 12: Proportional distribution of new equity release sales, by product type, 2012-16
- Mortgage repayments push up plan values
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- Figure 13: Average amount released, by product type, H1 2015-H2 2016
Market Drivers
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- Equity release buoyed by strong housing market…
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- Figure 14: Average house prices in the UK, January 2005-January 2017
- …but growth may have peaked
- Number of over-45s renting has soared in the past five years
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- Figure 15: Housing tenure, by age of household reference person, England data 2010/11 and 2015/16
- 40,000 interest-only mortgages maturing each year
- The pension gaps
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- Figure 16: Consumer agreement with statements regarding their pension, June 2016
- Equity release used to enjoy retirement as well as to service debt
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- Figure 17: Reason for choosing equity release, 2011 and 2016
- Boundaries between equity release and mortgages becoming more blurred
Companies and Brands – What You Need to Know
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- Big three lenders control 85% of the market
- Brokers bolster advice services
- JRP Group rolls out new trading brand
- Providers look to carve out a niche
Market Share
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- Big three lenders control 85% of the market
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- Figure 18: Equity release market share, by value of new sales, 2015 and 2016
- Legal & General sales tripled in 2016
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- Figure 19: Top four equity release providers, by value of new sales, 2013-16
Competitive Strategies
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- Strong preference for face-to-face advice
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- Figure 20: Preferred sources of retirement income advice, February 2017
- Brokers bolster advice services
- JRP Group rolls out new trading brand
- Legal & General lands with a bang
- Room for more?
- Providers look to carve out a niche
- Family affairs
Advertising and Marketing Activity
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- Total above-the-line expenditure rose by 80% in 2016
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- Figure 21: Above-the-line, online display and direct mail advertising expenditure on equity release, 2012-16
- Leading brokers’ ATL spend doubled in 2016
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- Figure 22: Above-the-line, online display and direct mail advertising expenditure on equity release, by advertiser, 2015 and 2016
- TV accounts for nearly half of ATL expenditure
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- Figure 23: Above-the-line, online display and direct mail advertising expenditure on equity release, by media type, 2016
The Consumer – What You Need to Know
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- One in 10 over-45s expect to downsize
- Nearly one in three over-45s still paying off mortgage
- Around one in seven weighing up equity release schemes
- Education can help to broaden appeal
- Peer power
Sources of Retirement Income
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- One in 10 consumers expect to downsize
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- Figure 24: Expected/actual sources of retirement income, February 2017
- One in 20 home buyers to use equity release to fund retirement
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- Figure 25: Expected/actual sources of retirement income, by housing tenure, February 2017
- Aggregation could offer more transparency
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- Figure 26: Repertoire of expected/actual sources of retirement income, February 2017
Debt Levels at Retirement
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- Nearly one in three over-45s are still paying off mortgage
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- Figure 27: Current outstanding debts, February 2017
- Majority of homeowners are debt-free
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- Figure 28: Current outstanding debts, by housing tenure, February 2017
- Only a quarter of people in largest households are debt-free
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- Figure 29: Current outstanding debts, by number of people living in household, February 2017
Financial Health in Retirement
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- 30% of over-45s feeling cautious or concerned
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- Figure 30: Financial health in retirement, February 2017
- The next generation of retirees expect to be less comfortable
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- Figure 31: Financial health in retirement, by working status, February 2017
- Thinking about life after death
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- Figure 32: Financial health in retirement, by marital status, February 2017
Consideration of Equity Release
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- Around one in seven weighing up equity release schemes
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- Figure 33: Consideration of equity release schemes, February 2015-February 2017
- Mortgage owners more open to releasing equity
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- Figure 34: Consideration of equity release schemes, February 2017
Attitudes towards Equity Release
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- Education can help to broaden appeal
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- Figure 35: Attitudes towards equity release, February 2017
- Expectation of inheritance is dying out
Sources of Retirement Income Advice
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- Peer power
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- Figure 36: Preferred sources of retirement income advice, February 2017
- Equity release audience not shut off to technology
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- Figure 37: Preferred sources of retirement income advice, by consideration of equity release, February 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Additional best-case/worst-case forecast tables
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- Figure 38: Best- and worst-case forecast for the value of new equity release schemes sold, 2016-21
- Figure 39: Best- and worst-case forecast for the volume of new equity release schemes sold, 2016-21
- Forecast methodology
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