Good news for older homeowners in the UK. Greater consumer education around the benefits of equity release is vital for market growth in 2012, research among key industry figures carried out by SHIP reveals.
Over half of respondents (52%) worried that lack of consumer understanding would hamper the growth of the equity release market and 41% felt that lack of consumer confidence in these products prevented more consumers from using their housing equity.
Equity release advisers (63%) were particularly worried about people’s understanding of the products.
The single greatest thing that industry figures wished consumers understood was that as their largest asset, their home should form part of their retirement planning (51%).
The fact that products are safer than before (27%) is also a key feature that consumers should be encouraged to understand.
However, while consumer perception remains a concern, respondents saw some key strengths in the industry.
Almost two-thirds (58%) of respondents felt that equity release fulfilled a growing consumer need, and 49% suggested that the changing face of retirement would lead to market growth.
Robust regulation which safeguards customers (46%) and passionate advocacy of these products by providers and intermediaries alike (32%) were also seen as key strengths.
Educating consumers as to the benefits of equity release was seen as a key task for SHIP going forward.
Indeed 23% said SHIP needed to continue to educate consumers, 18% wanted SHIP to use the combined influence of the membership to tackle barriers and 16% felt equity release should be promoted as a retirement planning tool.
Almost half (47%) predict that the market will grow and return to more normal numbers, possibly in anticipation of greater government engagement with the industry (43%), leading to a boost in consumer awareness of the products and their uses.
The retirement landscape and consumers’ needs are constantly evolving and 37% believe that product innovation to meet these demands will make equity release more attractive to consumers.
Over a third (35%) believe that the market will grow with the emergence of new entrants to the market.
Andrea Rozario, director general of SHIP, said: “As SHIP prepares to open up its membership to the wider equity release industry, this research reveals that the majority of stakeholders consider the lack of consumer understanding to be a real barrier to the market living up to its true potential”.
“This research provides SHIP with a clear mandate to prioritise consumer education and engagement with the industry as part of its new structure”.
“As people’s retirement expectations change and the need for tailored individual solutions grows, there is a huge opportunity for SHIP to position this industry to help people make the most of their retirements”.
Source: Mortgage Introducer