It added equity release will play a greater role in retirement planning. In the report entitled “Equity Release in the UK 2007 – Lifetime Mortgages and Home Reversions: A Retirement Solution”, Defaqto states that a combination of under-funded pensions, low annuity rates, demographic issues and pensioner debt, along with historically high levels of equity in the housing stock make equity release an increasingly important alternative for retirement planning.
David Black, Defaqto’s head of banking and author of the report, said: “A number of factors are coming together which will make equity release an increasingly sought-after retirement solution for many people.
“Although it remains essential that people explore alternatives to equity release as well as its possible implications; equity release will become an increasingly relevant option in future retirement planning. It clearly won’t suit everyone but it will increasingly provide a solution for many people."
Mark Roberts, head of faculty of financial regulation at the ifs School of Finance, concluded: “The Defaqto report again highlights the fact this a growing area of business for advisers. A greater focus on equity release could therefore be a good business decision to take.
"As increasing numbers of consumers consider purchasing an equity release product demand for advice will obviously grow. To meet this need, increasing numbers of financial and mortgage advisers will need to gain an appropriate qualification.
"We are now beginning to see this take effect - since regulation came into force earlier this month, several hundred advisers have already registered to take our new Certificate in Regulated Equity Release (CeRER).”
From 6 April 2007, the sale and marketing of equity release products, including lifetime mortgages and home reversion plans became regulated by the Financial Services Authority (FSA).
