Our view
Aug 06 - UK: Norwich Union comments on outlook for equity release market following release of half-year sales figures
- More providers will benefit consumers and help market to grow
Norwich Union believes the equity release market needs more high-street providers, greater competition and a wider range of products if it is to continue growing.
Daren Carter, director of sales and marketing at Norwich Union Personal Finance, said: “A Social Market Foundation report into the equity release market [commissioned by Norwich Union] said that if the market is to grow, consumers need to be more aware of equity release and big name brands need to enter the market bringing a wider range of products and increased competition.
“Consumer confidence in equity release products will increase demand and encourage high street banks and building societies to enter the market. This will bring greater product innovation and competition to the consumers’ benefit.
“As the equity release market grows, more people will realise that it is one of the tools that can be used to fund retirement.”
Norwich Union continued to lead the equity release market with sales in the first half of the year of £165 million, slightly lower than last year (2005: £179 million), as the market remained subdued.
The launch of Cash Reserve Option in July means that Norwich Union is one of the few providers to compete in all areas of the equity release market, including the growing drawdown sector which accounted for 35% of sales in the Intermediary sector during Q2 2006.
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Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
Cheryl Cox 01904 452791 Out of hours 07800 695275
Notes to editors:
About the Norwich Union Cash Reserve Option
The Cash Reserve Option is guaranteed for ten years. The overall cost for comparison is 7% APR through NUPF salesforce. The actual rate will depend upon personal circumstances.
Under exceptional circumstances the reserve will be cancelled automatically if:
- Norwich Union equity Release Ltd becomes insolvent or ceases to be authorised by the FSA to provide Lifetime Mortgages.
- The reserve can be suspended if the borrower breaches terms and conditions, for example, if the borrower becomes bankrupt.
All borrowers must be a minimum age of 60. There is no maximum age. The plan can be written on a single or joint basis.
The interest rate is fixed at the rate that is current on the day that the initial loan and each subsequent borrowing is released. This means that a different rate may be charged for each release. Interest is calculated on a daily basis and compounded annually.
Norwich Union is a member of Safe Homes Income Plans (SHIP), an organisation that was set up in 1991 to promote safe equity release products. As a member of SHIP, Norwich Union lifetime mortgages have a no-negative equity guarantee built in as standard.
Norwich Union is the UK’s largest insurer. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union is the UK’s largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.
Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media