Thousands of homeowners are cashing in on the freedom offered by equity release products, new industry figures reveal.
Thousands of homeowners are cashing in on the freedom offered by equity release products, new industry figures reveal.
Figures out this month from SHIP (Safe Home Income Plans) – which represents the major equity release providers – show that the market has grown by more than 200% in the past five years.
Figures for the first six months of 2001 show that the over- 60’s received over Ł230 million in equity release schemes – which allow homeowners to release money from their properties - compared with just Ł70 million in 1997.
Despite this continued growth, research from Norwich Union, the largest provider of mortgage-based equity release products, shows that many over-60s are still in the dark when it comes to financial matters.
A staggering 94% cent don’t know that IFA stands for independent financial adviser and only two-fifths have ever sought professional financial advice.
Instead the over 60s rely on and trust family members most when it comes to financial advice and decisions. The person they are likely to turn to next is their bank manager.
To help the over-60s and their families understand how equity release works, Norwich Union has produced a free step-by- step guide called ‘Unlock your future – equity release made easy’.
The guide, written by a personal finance journalist, is designed to provide impartial, straightforward information about the various steps involved in choosing and taking out an equity release plan.
It includes details about how to gather information about the various plans available, the valuation process, the legal paperwork and keeping in touch with the equity release provider. It also includes a checklist and jargon buster of difficult terms or phrases.
Daren Carter, head of equity release marketing for Norwich Union, said: “These latest industry figures are very encouraging. It would appear that the equity release is no longer simply viewed as a last resort and people are now able to enjoy everything from dream holidays to home extensions as the equity release market takes off.
“Our aim is to help take some of the mystery out of the equity release process by giving the over-60s and their families the confidence to make the right choices to help them put cash in their pockets so they can get the most out of retirement.”
To obtain a free copy of Norwich Union’s ‘Unlock your future – equity release made easy’ guide call Freefone 0800 122 876
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For further media information, contact Anja Kueppers or Matthew Buchanan at QBO on 020 7379 0304 or Louise Zucchi at Norwich Union Press Office on 08703 666860
Notes to Editors:
- Norwich Union commissioned an independent survey of 496 people aged over 60 in May 2001
- People interested in finding out more about Norwich Union’s equity release products should call 0845 300 2493 or talk it over with their own Financial Adviser.
- Security will be required. CHECK THAT THIS MORTGAGE WILL MEET YOUR NEEDS IF YOU WANT TO MOVE OR SELL YOUR HOME OR WANT YOUR FAMILY TO INHERIT IT. IF YOU ARE IN DOUBT SEEK INDEPENDENT ADVICE.
- Norwich Union offers two options for people wanting to release cash from their home. The Flexible Cash Release Plan releases a cash lump sum and the Flexible Income Release Plan enables customers to receive a regular income – or the option to take up to 25% of the money released as a cash lump sum as well as a regular income. Loans are secured by a legal charge on their property.
There is nothing to repay during the customers’ lifetime unless the house is sold or they need to go into long term care.
The plans should be seen as a lifetime commitment. Substantial early repayment charges may be payable if the loan is repaid for a reason other than death or long term care needs.
Full terms and conditions or a personal illustration are available on request.
The income under a Flexible Income Release Plan is provided by a Norwich Union Immediate Life Annuity. The annuity has no cash in value at any time. Part of the income received under a FIRP is taxable as savings income.
Entitlement to state/tax benefits may be affected by taking out an equity release plan.
Norwich Union only advises on its own products.
- CGU and Norwich Union merged on 30 May 2000 to create CGNU plc - the world’s 6th largest insurer, the UK's largest insurance group and one of the top-five life insurers in Europe with substantial positions in other markets around the world.
- CGNU’s principal business activities are long-term savings, fund management and general insurance, with worldwide premium income and retail investment sales from ongoing business of over Ł27 billion and assets under management of more than Ł210 billion (correct as at February 2001).
- From October 2000, the combined life and pensions, general insurance and retail fund management businesses in the UK operate under the Norwich Union brand, while the institutional investment business operates under the Morley Fund Management brand.
- Norwich Union’s news releases are available on this site