Equity release is still largely missing from retirement planning conversations, research from Canada Life reveals.
Despite property representing a significant portion of household wealth among homeowners who had spoken to a financial adviser about retirement, only 7% were offered equity release unprompted while just 6% asked about it themselves. Over three-quarters (76%) reported that the topic was never discussed.
The research highlights a potential opportunity for advisers to help clients unlock greater financial flexibility in later life.
Less than half (48%) of homeowners surveyed were confident their savings and income would last through retirement, while property accounts for roughly 40% of UK household wealth.
Knowledge gaps around equity release remain significant. Over two-thirds (67%) were unaware they could pass their home on to children after releasing equity, 63% did not know whether moving house was possible and 82% were unaware of the No Negative Equity Guarantee, with 42% incorrectly believing they could owe more than their property’s value.
UNLOCKING MONEY
Pete Maddern (main picture), managing director, retirement at Canada Life, said: “As people live longer and many individuals find their pension savings falling short, unlocking money tied up in property to supplement pension income is likely to become an increasingly important aspect of retirement planning.
“Furthermore, with unspent pensions set to be included in inheritance tax calculations from 2027, more individuals will be seeking flexible estate planning strategies.
“Equity release can play a key role in enabling wealth to be passed to the next generation and in mitigating potential inheritance tax liabilities.”
IMPROVE UNDERSTANDING
And he added: “It’s encouraging to see the progress the FCA has made in recent months to explore how the later life lending sector and advice framework should evolve.
“While equity release will not be right for everyone, these developments have the potential to improve consumer understanding and awareness of later life lending, and to enable advisers to have more holistic conversations with their clients about whether equity release could help them achieve their later life and retirement goals.”
