ERS data reveals changes to the methods of accessing advice, the demographics of customers, and the usage of funds.
Equity Release Supermarket (ERS) recorded that 83% of advice was conducted over the telephone in April and May, compared to 55% in Q1.
Commenting on the data, Mark Gregory (pictured), founder and CEO of ERS, said: “The pandemic has fundamentally changed the world as we know it.
"People are living differently, interacting differently, purchasing differently and in essence thinking differently.
"We’ve witnessed the coronavirus reshape the industry in real time and rapidly accelerate digital connectivity and underlying trends.
"For instance, following the launch of our live video chat capabilities in April, we’ve seen a 17% uplift in the use of this channel throughout May.
“We’ve always been recognised as a digital innovator within the sector and with our target market’s growing confidence in the use of technology, gained from either keeping in touch with their families or making online purchases during lockdown, we are ideally placed to connect and help our customers during this time.”
ERS also noted a 12% increase in plans taken out by single people in May compared to the previous four months.
There has also been a 4% increase in plans taken out by 55 to 59 year-olds, a 3.5% increase in the 60 to 64 age bracket, and a 5% increase in plans being taken out by those aged between 65-69 over the same period.
Meanwhile, there was a 9% drop in the number of plans taken out by those aged between 70 and 74.
The data also revealed a shift in the usage of funds.
Gifting to children accounted for 19.3% of financial usage in May, up 7.5% compared to the previous months of the year, whilst repaying debt rose by 2.5% and holidays fell dramatically to less than 1% in May.
Gregory added: “Our business grew by 58% in Q1 of this year, predominantly as a result of post-Brexit confidence returning to the market, and whilst we are seeing slower growth during Q2 so far, this is not due to a fall in market interest but simply a delay in the process due to challenges caused by the pandemic.
"In fact, at the end of May, our enquiry volumes were up 16% [year-on-year] and May alone saw an uplift in enquiries to 29% [year-on-year].
“We’ve also seen that the types of plans consumers have taken out in April and May has shifted in comparison to those taken out in Q1 - lump sum plans accounted for 61.2% of plans across April and May, compared to 56.5% in Q1.
“Equally, drawdown plans fell in popularity, with just 33.7% of plans over April and May as opposed to 37.9% in Q1.
"This could be a result of people trying to maximise their financial support in these economically difficult times.
"However, the average case size did fall in May by 6% when compared to the previous [four months], which may be due to the fact that lenders had to use desktop valuations to calculate the amounts they would lend during the lockdown given that surveyors could not make home visits.”
In London and the North West, the number of applications grew by 1.6% and 1.4%, respectively.
Gregory said: “The pandemic has no doubt caused the equity release market to slow, but this has only had a short-term effect.
"Now that lenders can return to home-based valuations, as well as the buoyant enquiry volumes we’ve gained at Equity Release Supermarket, I am very confident in the outlook for H2.
"Lenders responded both quickly and positively to the challenges posed by lockdown and the digital programmes some have put in place will transform our industry.”
