Saga sees equity release as key element in retirement planning

“The figures released today for the last quarter are very encouraging, especially when the latest CML figures show a massive decrease in conventional mortgages. Overall there has been a slight downturn in the equity release market year on year but this is to be expected in the face of the global economic slowdown.

The total value of new business written has increased by 10% this quarter demonstrating that people are still turning to equity release to help fund their retirement whilst remaining in the family home.

It is however to be expected that despite the quarterly growth, the annual value of business written is down by 6.8%, this is an effect of the current financial climate, but has also been influenced by the increasing popularity of drawdown mortgages. Nearly 57% of all plans now written are on a drawdown basis, where a much smaller amount of capital is released at outset with the ability to drawdown more capital as and when it is required. This has reduced the overall amount of equity withdrawn from properties at outset but given people the flexibility to withdraw further equity only when required.

In the face of soaring pensioner inflation, we still believe that equity release can be a vital way for older people to tap into some of the value they’ve built up in their properties and use it to maintain their lifestyle in retirement. In particular we’ve seen an increasing number of people who are reluctant or unable to sell their homes using equity release to pay for renovations.

We expect sales of equity release plans to continue to grow as it becomes more recognised as a key element in retirement planning".