New analysis from Later Life Services Platform – Air – suggests that while the October mini-budget saw a decrease in the number of equity release plans on the market from 582 (Q3 2022) to 317 (October 2022), product numbers remain above pre-pandemic numbers (2019 – 314).
Product Range Remains Higher than Pre-Pandemic Levels:
They are also substantially above those recorded just four years ago (144 plans) and a world away from the choice on the market ten years ago (17 plans). Indeed, for every one product available in 2012, there are now 18 products built to meet customers’ needs in October 2022.
|2012||2014||2016||2018||2020||2022 – Q3||2022 – Oct|
|No. Products on Market||17||27||58||144||397||582||317|
All the core product features which make modern equity release products more flexible than their predecessors, have also increased over the last four years.
The ability to make ad hoc interest payments within lenders criteria without incurring an early repayment charge is now the fifth Equity Release Council product standard and available across all new eligible products. The number of plans that allow ongoing payments to manage the roll up of interest has also increased from 22 (2018) to 190 (2022).
|Ad Hoc Payments||117||234||317|
The availability of features such as inheritance protection (+29 to 92) and downsizing protection (+120 to 193) has also grown over this period as increasing numbers of customers look to find products which provide them with the flexibility and protections which are ideally suited to their individual circumstances.
While variable or gilt-linked early repayment charges (ERC) have been a feature of the market since inception, we’ve seen the surety of fixed ERC’s gain prominence rising from being available on 80 products (October 2018) to 200 (October 2022).
Stuart Wilson, CEO of Air, said:
“While there is no doubt that the mini-budget saw lenders in the equity release market, as with other residential markets, pause for breath, the number of plans is higher than pre-pandemic and customers have access to a wider range of features than ever before.
“In the current uncertain environment, being able to find a customer the right fit for their individual circumstances is even more vital as, while people still need to use their housing equity, they are being naturally cautious around making decisions. Being able to explain that there is downsizing protection and the ability to guarantee an inheritance, in addition to a fixed rate for life and safeguards like the no-negative equity guarantee, should provide both customers and advisers with confidence.
“Advisers need to focus on getting the basics right as there is no question that with rising residential mortgage rates, pensions being squeezed and families looking for support that over-55s need to consider all their options and make choices that work for them now and in the future.”