How do over-55s learn about their later life lending options?

Majority of equity release customers don't go directly to an adviser

How do over-55s learn about their later life lending options?

Seven in 10, or 70%, of equity release customers do their own research before speaking to an adviser about their later life lending options, new research from Standard Life Home Finance has revealed.

A similar proportion (70%) of over-55 homeowners said they carried out their own online research to help them better understand what equity release options were available. Around a third (34%) relied on information from families and friends in learning about equity release, and slightly more (35%) requested guides from various companies.

Meanwhile, just one in seven (14%) customers went directly to an adviser for a consultation before conducting any research of their own.

Standard Life Home Finance pointed out that while independent research does highlight the benefits of these products, it can also lead to misconceptions or exacerbate concerns that modern lending features can manage.

Asked about their views ahead of speaking to an adviser, four in 10 clients (40%) said that while equity release isn’t right for everyone, it can help some people. A further 30% felt it was a good way of accessing some of the equity tied up in a home.

However, 22% were worried it could impact or stop them from leaving an inheritance, while 15% were concerned they could owe more than the value of their home. About one in 12 (8%) was worried they could pass the debt on to their families.

After speaking with a financial adviser, nearly all (97%) respondents said they felt they understood equity release. Six in 10 (61%) also felt relieved after their consultation as it gave them a clearer idea of what their options were, while 58% said they felt optimistic for the same reason.

Read more: Equity release hits new high in Q2 2022.

Kay Westgarth, head of sales at Standard Life Home Finance, said that with increasing numbers of people considering equity release, it was great to see that many were keen to develop an understanding of their options before speaking to an adviser.

“Specialist advice is vital to help people to make the right choices for their individual circumstances now and in the future, but an informed customer is an engaged customer who has genuinely started to think carefully about their options,” Westgarth stated. “That said, certain misconceptions and concerns can arise when information-gathering or conducting independent research, which may need the support of a specialist to unpick.”

She noted that equity release products had evolved and developed significantly over the last five years, and many people may not realise that those who take out a product with Standard Life Home Finance, for example, receive downsizing protection as standard.

“Simply highlighting product features – such as the no negative equity guarantee, the ability to make interest payments and the availability of inheritance protection – can set many customers’ minds at rest,” Westgarth said. “The difference in customer attitudes before and after having a consultation with a financial adviser clearly shows the true value of advice.”

The research, which was part of the Standard Life’s Lightbulb Moments survey, collated the views of more than 500 over-55 homeowners who had considered equity release.

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