Today sees the release of the latest Equity Release Council(1) and HMRC Pension Freedom(2) figures. Both report a record 12 months.
Equity Release: £3.95 billion of housing wealth was unlocked via equity release between July 2018 and June 2019. This is up £450 million (12%) on the previous twelve months, despite some slowdown in H1 2019. In Q2 2019 alone, £911 million was unlocked via equity release. This exceeds the total amount that was being unlocked over four quarters just a decade ago.
It is notable that the use of drawdown mortgages now dominates the equity release market, representing more than two-thirds (67%) of new plans taken out in Q2 2019. Flexible use of equity release is growing fastest.
Pension Freedoms: £8.7 billion has been withdrawn from pensions via the pension flexibilities between July 2018 and June 2019. This is up £1.6 billion (23%) on the previous twelve months. Q2 2019 alone was an all time high, with £2.75 billion being withdrawn via the pension flexibilities.
As with equity release, thousands are seeking flexible use of their pensions. The average amount withdrawn per individual continues to trend downwards, to an average of £8,184 in the latest figures. This eases the concern that the pension freedoms would drive a “dash for cash”.
Commenting, Alistair McQueen, Head of Savings & Retirement at Aviva said:
“Today’s figures show that people are turning to all their assets – property and pensions – to fund their later lives, like never before. And we have a record number of people saving for their retirement too, via automatic enrolment(3).
“The next ten years will see nine million people reach the age of 55 – the age at which we are typically eligible for equity release and the pension freedoms. Nine million is more than we have ever seen before(4).
“The desire of the nine million to flexibly blend their assets at retirement – property and pensions – looks set to keep growing.”
- ENDS -
Sources contain public sector information licensed under the Open Government Licence v3.0.
Notes to editors:
- For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
- Aviva is a leading international savings, retirement and insurance business. We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
- Our vision is to earn our customers’ trust as the best place to save for the future, navigate retirement and insure what matters most to them. In 2019, we paid £33.2 billion in claims and benefits on behalf of our 33.4 million customers.
- We will focus on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. Our International businesses in Europe and Asia will be managed for long-term shareholder value. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience.
- Total group assets under management at Aviva group are £522 billion and our Solvency II capital surplus is £12.0 billion (HY20). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
- For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
- The Aviva newsroom at www.aviva.com/newsroom includes links to our image library, research reports and our news release archive. Sign up to get the latest news from Aviva by email.
- You can follow us on Twitter: www.twitter.com/avivaplc/
- You can follow us on LinkedIn: www.linkedin.com/company/aviva-plc
- For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva
- We have a Globelynx system for broadcast interviews. Please contact the Press Officer noted above if you would like to make a booking.