Need for further clarification and advice on equity release

The 1st quarter 2008 sales figures issued by SHIP reflect a strong underlying demand despite a drop in funds released, comments Just Retirement.

David Cooper, Marketing Director at Just Retirement said: "Despite the significant concern over events at Northern Rock, sales of equity release have only experienced a slight slowdown in what we would, in any event, have expected to have been a quiet quarter.

This slight dip is due to extreme and temporary factors and the fact that sales have not plummeted demonstrates the significant underlying demand. The increasing number of drawdown sales shows that customers and advisers are more conscious of the issues involved and are taking action to ensure their continued security and access to funds. With companies such as Just Retirement being independent of external funding, the equity release market offers a very attractive option for a great many people in an uncertain economic environment.

However, we believe there is still a requirement for more advisers to include equity release as part of their service and we will continue to do all we can to help them enter the market with a suitable proposition.

We expect to see demand continue to increase as people recognise the many possibilities their home offers to improve their situation. In the current economic environment, equity release continues to provide value for money in comparison to standard residential mortgages, with rates starting from 6.25% AER.

Just Retirement is hugely supportive of this market and we are very optimistic about the future. Indeed our own new business figures for Q1 show actual growth since the past quarter to £37.1 million. What we now need is for confidence levels to rise and the levels of advice available to support this potential."

Equity release is an important option for people faced with a shortfall of cash or income in retirement as well as those seeking to enjoy a higher standard of living or pursue specific interests. Longer life expectancy and concerns about the level of retirement savings and security will drive investigation of alternative sources of funds. Add to this the general rise in the level of consumer debt in recent years together with increases in the cost of living for pensioners and Just Retirement expects the demand for lifetime mortgage and home reversion products to grow steadily as the number of people reaching retirement rises. The company believes that consideration of the home as an asset that can be used to generate funds should be an integral part of the financial planning process both before and after retirement.