Photograph of Andrea Rozario, the author of this document.

Mortgage Strategy

Are we nearing the end of this global drama? Who can say. A year has become 18 months, and I feel like we will close in on two years of struggle way before this pandemic is a thing of the past. Maybe this will be with us forever, but we can’t just wallow. Regardless of the seemingly permanent pandemic, it’s important to keep our heads down and continue – both in business and in life.

Equity release has weathered this global storm. The whole world ground to a halt, but the lifetime mortgage has remained steady and I feel like we are well placed to kick on once normality fully resumes. What’s more, although the market has remained flat rather than growing as before, our customers are almost exclusively happy with their decision to release their property wealth. In fact, so happy are they that they are willing to spread the good word far and wide. 

According to a recent study, ‘90% of equity release customers have or would recommend it to family and friends’. This is massive. Not only are the vast majority of our customers happy, they are so pleased with their decision they are willing to pass on the recommendation to their nearest and dearest. They are are willing to put their neck on the line. There isn’t a ringing endorsement possible that can match this, especially when you consider the significance of such a decision. Equity release in 2021 is as solid as ever. 

Having 9 out of every 10 customers sharing their good experience with equity release will mean our market will naturally continue its growth. Ultimately, this stat must be at the heart of everything we do as an industry. Happy customers are immeasurably more important than anything else – which is true of pretty much every industry. 

Happy days, right? Well, a word of warning. We are still a small niche of the broader mortgage market and although an enormous share of our clients are happy, we need to pump up the customer population. Happy customers are great, but more happy customers is even better. 

Plus, not only is this critical to the future-proofing of equity release, it is also vitally important to the future of retirement planning as a whole. The seriousness of broadening our industry and increasing customer numbers comes into sharp focus when you realise how many people are sleepwalking toward a huge financial headache in retirement. 

According to a far less rosy recent study, 4 in 10 people claim they will enter retirement with no financial planning. Nearly half of people are cruising towards ending their working life and reducing their income without putting plans in place. This is clearly not ideal. For those who enter retirement with no plan, a financial alternative may well be needed urgently. And equity release could be perfectly placed to help.

While 40% of people may not have put plans in place for retirement, house price inflation has been calmly ticking over in the background year after year. For most retirees, it is property wealth that will save the day and accessing said wealth will be the plan many non-planners will find themselves faced with. 

For those that do not want to upsticks and downsize – which I am confident will be a fair amount of people entering retirement – thankfully there is an option where 90% of people are happy to pass on a recommendation – maybe they’ve already heard about it? 

In essence, it would appear that our customers, who were once reluctant to admit to taking equity release, are now happy to recommend to others. As an industry, we need to redouble our efforts in celebrating our products and our offering. Our customers seem to know this, but do we realise how important equity release is?

Nearly half of people are entering retirement with no financial plans whatsoever, and we have a product that people clearly trust once they have experience. It’s not rocket science. The lifetime mortgage is on the precipice of becoming integral to the entirety of retirement planning – not just a fringe player. We need to continue to create innovative products, deliver sound advice and ensure clear marketing messages about the option of equity release when it’s clear our current customers have so much confidence. Do this and those without a plan may soon have one they are happy to recommend.