Providers lent a record amount to equity release customers last year.
According to figures published last week by the Equity Release Council, £1.4bn was lent in 2014, which was 29 per cent higher than the £1bn released the year before and 14 per cent higher than the previous record of £1.2bn in 2007.
A total of 21,336 customers took out equity release plans in 2014, a 13 per cent increase on the 18,881 borrowers in 2013. The average equity release plan hit £64,787 in 2014, 14 per cent above 2013’s average and 7 per cent higher than the previous record of £60,549, set in 1998.
ERC chairman Nigel Waterson says: “These lending figures show that 2014 has been a record-breaking year for the industry. Equity release is proving a crucial tool for financial planning in retirement and is allowing retirees to improve their standard of living and giving them more flexibility to support themselves or family members.
“The new pension freedoms won’t change the fact that many people do not have enough savings for later life. There is a danger that people’s pension pots will be ‘here today, gone tomorrow’ – but housing wealth is the one constant that many in this generation can rely on for support.”
Bridgewater Equity Release sales and distribution manager Chris Prior says the sector could advance more than £2bn this year.
He says: “The outlook for the market is extremely positive and we would not be surprised to see 2015 figures touching, or perhaps surpassing, the £2bn mark. After many years of threatening to break into the mainstream, it appears that equity release is becoming a much more sought-after solution.
“With the retirement income changes being introduced in April, we expect equity release product take-up to increase.”