The Future of the UK Equity Release Market: Consumer Insights and Stakeholder Perspectives

While debates about the role and relevance of housing asset use in later life are not new, recent increases in the number of equity release plans taken out by older people suggest that housing equity is growing in importance as a source of later life finance. The equity release market has long been viewed as having the potential to offer a partial solution to the challenges of financing later-life needs in an ageing, asset-based welfare society. More recently, a report by the House of Lords Select Committee on Public Service and Demographic Change (2013) estimated that people aged over the state pension age in 2009 owned roughly �250bn in housing wealth that was ?available? to be released. It noted the importance of a safe and effective equity release market to ?enable more people to use their assets to help pay for the cost of their social care, to adapt their homes, and to support their incomes? (p.138). At the same time, significant changes in the wider retirement landscape have highlighted acute and increasing pressures on income and care needs for older home owners, particularly for those who are less well-off. Radical pension reforms to end compulsory annuitisation, increasing numbers of older people retiring with outstanding interest only mortgages (Collard and Hayes, 2014), and the passage of the 2014 Care Act which introduced a cap on the costs of long-term care (Commission on Funding of Care and Support, 2011), have focused a spotlight on the need for financial products that enable people to meet their later life needs through leveraging their (housing) assets (Association of British Insurers, 2014). This is a moment of opportunity and challenge for the equity release industry. This report draws on new empirical research focused on the consumer perspective and experience, as well as the industry and other stakeholder views, to reflect on the future direction of the market. Our consumer study explores the views and experiences of 70 older people who took out equity release plans at least 5 years ago to identify the key issues for them, including what works well, and how they think the processes and products could be more effective and attractive to meet their needs. Our stakeholder study captures the views and experiences of 14 professionals engaged in the equity release arena, to identify their perspectives on the changing market, on the impacts this will have for consumer needs, objectives and priorities, and on what needs to happen next to create an environment for the growth of the industry in ways that will serve the needs of consumers. The data generated from this study offers a valuable and timely contribution to a strategically important question for the UK and other ageing, asset-based welfare societies: where next for equity release?