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Drawdown benefits are not promoted enough

Not enough is being done to educate consumers on the benefits of drawdown plans, says Dean Mirfin, group director of Key Retirement Solutions.

At the launch of the firm’s latest Equity Release Market Monitor survey last week, Mirfin warned that too many consumers are releasing their money in a lump sum, instead of drawing it down over time.

He says this could be because advisers are asking the wrong questions or because consumers are not aware of the benefits of drawdown.

Mirfin adds that although drawdown accounted for 74% of its own sales compared with the market average of 55% in 2011, it would like drawdown to represent a bigger proportion of equity release sales.

He says: “Customers using drawdown benefit from lower borrowing costs because they are able to draw funds when required. There is still work to be done to ensure they are not taking out single advance equity release when they do not have a requirement for funds all at once.”

But Vanessa Owen, head of equity release at LV=, has not seen evidence of consumers releasing money in a lump sum when drawdown would be better.

She says: “Often when people get the money in one lump sum it is for something such as a house purchase or to pay off existing debts, so it is logical that they are withdrawing the money in this way.”


Uncertainty leaves economy in jeopardy

The outlook for the mortgage market has deteriorated in recent months as the impact of the slower economic recovery and upheavals in Europe are taken fully into account. But this revision in expectations has been pretty modest so far compared to previous shifts in the market.

Lending data belies fears of recession

Welcome to the first Lending Zone of 2012 and the year is already shaping up to be a bumpy ride. With gross domestic product falling by 0.2% in Q4 many are predicting further quantitative easing in February and saying that the UK is already in recession.

Sesame Bankhall gave lenders 8% more mortgage business last year

Sesame Bankhall Group delivered £26.1bn of mortgage business to lenders in 2011, an increase of 8% on the £24.2bn delivered in 2010. The group’s market share was 13.8% in 2011, up slightly from 13.3% the year before. John Cupis, managing director of PMS, says that while 2011 was another challenging year, PMS and Sesame outperformed […]


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