Over 90% of advisers believe in the future their clients will consider equity release as a way of supplementing their retirement income.
The results of Prudential’s latest Adviser Opportunity Survey, also reveals 21% believe equity release will become the biggest area of growth for retirement provision.
In the survey, which asked advisers how their business has changed over the years since they first started out, 74% of advisers said in the 1970s the biggest sector of business was savings while 69% focused on insurance products, and 64% saying pensions.
However according to Prudential, by the time the 1980s arrived, pensions advice was more dominant with 76% of advisers, followed by insurance products at 71% with savings advice slipping to third with just 64%.
Since then pensions has stayed the primary focus of advisers’ business through the 1990s, when investment products were seen by intermediaries as the future area of growth, through to the present day where IFAs claim investments and pensions are their main areas of business.
Oover the next five years 33% of advisers believe the biggest areas of growth will be in pension products, closely followed by investment products, however equity release products are also seen as a large growth area by 16% of advisers, particularly as 95% believe their clients will consider equity release to boost their pension.
Meanwhile in the specific area of retirement business, equity release is seen as the second biggest area behind traditional pension products, with 21% of IFAs believing it will be more popular than investment products or alternative investments.
Jan Holt, head of sales for Prudential Lifetime Mortgages, says the move away from State pension schemes in the 80’s drove the demand for private pension plans, while the buoyant stock markets of recent years and poor pension provision means all three generations of IFAs are now focusing on investments and pensions.
Prudential claims with 2.7m people not having enough income to meet all their financial commitments, the demand for finding ways of supplementing their retirement income is paramount.
It claims for many people traditional pension vehicles such as the State pension are simply not enough to provide this, and more people are looking for alternative ways to boost their income which for an increasing number involves using equity from their property.
Holt adds: “Equity release products clearly open up new opportunities for people who do not want to leave their home but still wish to access the money locked up in their bricks and mortar, and we expect the equity release market to grow to £3bn over the next five years. We have seen a lot of innovation in the market recently and products are now more and more tailored to customers’ needs and wants.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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