53% of advisers who sold an equity release product in the last year state that their clients were motivated by the prospect of being able to stay in their forever home, according to research from Canada Life.
Other popular reasons were to fund home improvements (85%), pay off existing debt (85%), and to support family and friends (73%).
However, 77% of advisers said they faced challenges when supporting clients with these products due to scaremongering stories, while 59% cited lack of awareness among consumers about what equity release is, as a barrier.
Only 11% of advisers felt there were no barriers to selling equity release products.
Other challenges raised include:
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Clients believing it is an expensive product – 54%
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Clients fearing loss of control or ownership of their property – 48%
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Clients believing that they won’t be able to leave an inheritance – 46%
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Clients believing that debt in retirement is bad – 30%
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Clients believing they’ll pass on debt to their estate – 27%
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Clients preferring the traditional ‘save the property, spend the pension’ approach – 18%
Canada Life said these challenges could be causing some advisers to shy away from equity release. Just 13% of those who supported a client with a lifetime mortgage purchase in the last year say they presented the idea to their clients, whereas 64% said their clients came to them with the idea.
Alice Watson, head of marketing, insurance, Canada Life, said: “It’s clear that there are still massive misconceptions when it comes to equity release, and it’s our collective responsibility as an industry to dispel these myths. For many homeowners, equity release can be an effective way to fund retirement, while allowing them to stay in their homes. We know the concept of a forever home is hugely emotive and important to a lot of people, so it’s no surprise that a large number of equity release sales were motivated by the desire to stay put.
“However, while the findings also show that some advisers are still tiptoeing around equity release, homeowners are increasingly looking for flexibility and certainty when it comes to planning for retirement and property wealth has a significant role to play in this.”