Combined with other main drivers such as the endemic lack of retirement funding, the potential entry into the market by high street banks and building societies and the Government emphasis on 'self funding' for retirement, Norwich Union is predicting that the market will grow to £2.4 billion by 2013.
This would be double the amount released in 2007 (£1.2 billion) and would see more than 1.5% of UK over-65 homeowners using these products annually to increase their income and enjoy a better standard of living in retirement.
With an estimated 115,617 consumers due to purchase 70,500 plans in 2013, Norwich Union believes it is a clear indication that as the population ages and the retirement funding gap grows over the next five years, equity release will become increasingly important.
Anthony Rafferty, head of marketing, post retirement at Norwich Union, said: "While the economic turmoil has been hugely detrimental to many parts of the UK economy, it may actually stimulate growth in the equity release market. Going forward, we see the market doubling over the next five years and truly coming into its own as a mainstream retirement planning and funding tool.
"In 2013, we predict the equity release market will help more than 115,617 over 65s by injecting £2.4 billion pounds into their pre or post retirement income. This phenomenal growth will also be stimulated by high street banks and building societies entering into referral deals, the general lack of pension provision and the Government's push for self-funded retirements."
