Archive for August, 2009
The changing demographics of the UK
Many experts predict that the demographic make-up of the UK is changing quite considerably. The UK’s population is enjoying a greater life expectancy than ever before. Many different figures have been quoted but the average estimate is that the number of over-65s will increase to represent 21% of the population, some 15.1million by 2029.
For the equity release market, this has obvious ramifications. But what about the indirect ramifications?
The sharp and sudden decrease in trend for final salary pensions, along with the Bank of England’s fear that the recession will last longer than first thought, the reliability of pension funds and other investment vehicles will come into question.
The trend for equity release has been steadily upwards, regulations have become more stringent and SHIP now accounts for around 90% of equity release providers. As mentioned in this news blog before, certain members of the House of Lords are calling for equity release to be government backed as a serious retirement-finance option. This all points to equity release possibly being accepted as the answer to the problems caused by the recession. There are risks involved with equity release, as there are with other retirement plans and investments. It is about the individual getting unbiased, professional advice and then weighing up their options taking all possibilities into the balance.
Homeowners releasing equity to help with children’s deposits
Recently, with the lending criteria being constricted by most high street banks, many first time buyers find themselves in a position where the deposit required to take out a mortgage is simply out of reach. It looks as though more and more homeowners are helping to share this challenge with their children using equity release as a tool to come up with the hefty deposits.
This may be seen as a welcome hand in a difficult time and goes to show that the recession cannot stifle innovation and determination. Equity release may affect the inheritance one is able to leave but many may agree that causes like this, among the countless other reasons, are well worth it.