The expansion of the equity release market seemed unstoppable in the run-up to 2019, but growth in the sector slowed, whilst product development did not. However, it was still surprising and enlightening to see the market maintain business throughout the year to similar levels seen in 2018, and in fact is still predicted to exceed, though slightly, the £3.9bn mark at year end 2019. The growth seen in the sector between 2015 and 2018 was phenomenal, and could not logically be sustained at such a level for long.
The beginning of 2018 saw 88 products on the equity release market, but by the end of 2019, 307 different product variations provided consumers with a level of choice to suit the vastly diverse range of needs presented by older borrowers.
What to expect in 2020?
There is absolutely no sign that product development in the later life lending sector will slow, and in fact, increased development should continue throughout 2020. With Brexit still on the horizon, older borrowers will still, and perhaps even more so, want to achieve a more secure financial future, and may think twice about putting such major decision off even further. A third of the wealth held by those aged 65 and over is property wealth, so if further uncertainty or even detrimental impacts come out of Brexit, making the most of out the wealth tied up in their homes will be essential to many of the growing older population.
The changes to the market and increased customer need has also lead to the London Institute of Banking and Finance (LIBF) to make key improvements to the CeRER qualification needed to advise on equity release.
As equity release is beginning to become more mainstream as an essential borrowing method for those nearing or in retirement, the LIBF have enhanced the qualification to provide more robust training. The number of topics has been increased from three to six, and the content concerning vulnerable customers, powers of attorney and complaint handling have undergone improvements.
With the amount of new products entering the market and the different features and extras on offer, the update to the qualification ensures it stays relevant and up to date.
Advisers looking to enhance their proposition would be well placed to consider entering the equity release sector in 2020. With more robust training, and more products on offer than ever before to match the varied needs of older customers, advisers looking to enter the market can be sure that 2020 will be an opportune year to do so.
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