Helping you build your business
By Jenny Cernicharo-Hazan, Head of Intermediary Marketing
For many of your clients, their bricks and mortar is one of their most valued assets – and one they’ve likely worked hard to own outright for many years. For clients who are approaching retirement, this asset could also be their most valuable.
House prices today are on average 12 times higher than they were 40 years ago, and the over 65s total homeowner equity is estimated to be worth £1.6 trillion. But that’s not the only thing that’s increased – life expectancy has too.
Living for longer
In the sixties the average life expectancy for a 65 year old was just 12 years for a man and 15 for a woman. Today it’s 87 for a male and 89 for a female. With this in mind, it’s no wonder more people are considering property wealth as a tool to help fund their retirement. After all, there could be more equity in their homes than cash in their pension pots.
While the thought of releasing money from a home they’ve worked hard to own may seem daunting, it doesn’t have to be.
Releasing equity with a lifetime mortgage
The most common type of equity release is a lifetime mortgage, which is a loan secured against your client’s home. With record-low interest rates and new product innovations, lifetime mortgages are now the fastest growing segment of the mortgage market.
We’ve seen interest rates plummet to as little as 2.99% this year, showing just how competitive these products can be for your clients – especially when the rate’s fixed for life.
Codes of conduct introduced in the early 90’s mean that your clients will never owe more than their home is worth – otherwise known as a “no negative equity guarantee”. They’ll also have the right to reside in their home for life, or until the last surviving homeowner moves into long-term care.
The Equity Release Council (formerly SHIP) introduced these consumer safeguards which remain a prerequisite for all of their members today. But while these safeguards have increased consumer confidence, many misconceptions around lifetime mortgages remain. We want to work with advisers like you to lead the conversation and dispel these myths.
A sharp rise in equity release lending has led to fierce competition and a wider range of products. Some offer facilities to service the monthly interest on the loan. Others can help your client increase their retirement income, by releasing a regular amount over a fixed period of time.
Despite these advancements and many others, approaching this sensitive subject is still no easy feat – and we want to help you change that.
Supporting your growth
We’ve made great progress already, helping almost 50 advisers prepare for their ER1 exams through our equity release revision workshops.
But for us this is just the beginning. We want to support you once you’ve entered the market too.
Over the past 6 months we’ve also been researching and meeting further with advisers to understand the challenges you’re facing. You’ve told us what does and doesn’t work, and that’s been invaluable in shaping the support we can provide.
Whether you work in a small business or are part of something larger, we’re all working to help clients make more informed choices. Over the coming months we’ll be providing you with business development ideas, case studies and white label materials to support your client conversations.
Helping your clients
Many advisers told us that they would value having leaflets and promotional materials that they can use to explain these types of products to their clients. So we’ve taken your feedback and developed easy-to-edit templates for you to use. These can be branded with your own logo and contact details using standard office software, taking away the hassle and cost of hiring a designer.
So forget about paying for expensive press adverts or spending hours on social media. We’ll start with the basics and show you practical steps you can take now to identify and attract more lifetime mortgage clients.