The UK life and pensions firm said it believes the equity release market is ripe for huge growth and is set to launch its own product in the autumn. More details will follow in due course.
Prudential has been promoting a Northern Rock lifetime mortgage product under Pru branding since July 2003. Prudential and Northern Rock’s arrangement for lifetime mortgages will come to an end later this year.
Prudential sees the lifetime mortgage market as one of its key business development opportunities for the next few years. Its research has shown that 91 per cent of financial advisers think clients will have to release equity in retirement, 13 per cent see equity release as the main driver of their business growth and that new advisers are set to enter the market within 12 months.
Of every ten financial advisers, nine expect home equity to play an important role in their clients’ retirement plans. Many are adapting their business plans to exploit this. 19 per cent expect lifetime mortgage sales to grow faster than any other financial product. And 13 per cent say that it is the main growth area for their business.
Ali Crossley, director of lifetime mortgages at Prudential, said: “Equity release schemes present a big opportunity for financial advisers and our research shows that they are very positive about the market. The fact almost a quarter of those who don’t currently sell lifetime mortgages are planning to start next year, is a sure sign of market growth. The lifetime mortgage market could grow from the £1 billion or so advanced per annum today, to £6.8 billion in 2008.”
Prudential said its proposition is being developed with advisers in mind. The ongoing development of Prudential’s proposition will take into account detailed feedback received from financial advisers. The key developments that they would like to see are greater flexibility in product delivery, greater transparency in terms of costs and limitations and lower costs to consumers.
