Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

UK Equity Investing market report

“Low savings rates and new technology should make investing in equities an attractive proposition for those who have become disillusioned with the cash savings market. However, ownership across the adult population remains low and a risk-averse attitude continues to hamper the uptake of investment products, with recent market volatility off-putting for those who lack investment experience. Helping customers to navigate these concerns through education and access to advice will be crucial in expanding the pool of investors.”
– Scott McDonald, Financial Services Analyst

This report discusses the following key topics:

  • Generation X – A lost generation of investors
  • Ethical and green funds provide opportunity to engage with young investors

This Report examines the investment market, with a focus on equity investments. The Report looks at the different investment options available to consumers when investing in equities, these include stocks and shares, stocks and shares ISAs, unit trust funds, investment trust funds and open-ended investment companies.

For the purposes of this Report, Mintel has used the following definitions:

Exchange-traded Funds (ETFs) are investment products that track an index (e.g. FTSE 100) by investing in the same stocks and shares that make up that index. ETFs are passively managed, meaning that the fees for these types of investment are typically lower than other actively managed investments (such as Unit Trust Funds and OEICs). Exchange-traded funds are listed on stock exchanges and can bought in the same way as individual shares or an investment trust fund.

Individual Company Shares are issued by businesses to raise equity or capital, these shares are offered to investors to purchase. Once an investor purchases shares they become a part owner of that business. The prices of shares can go up and down, meaning that the value of an investment may go up or down depending on how well the business is performing or other market conditions. When a consumer wishes to sell their stake in a business this activity is referred to as Share dealing.

Investment Bonds are life insurance policies where a lump sum is invested in an investment fund selected by a consumer or an adviser. These policies are typically whole of life policies and the returns a consumer receives when these policies are cashed in will depend on the performance of the fund, much like other investment products.

An Investment Trust Fund is another form of collective investment that allows investors to pool their money to purchase a variety of assets. Investment trusts are set up as companies and are listed on the London Stock Exchange, this means thatan investment trust has to publish an annual report and audited statements. They also have a board of directors that are responsible for safeguarding an investor’s interest.

Investment trust funds are closed-ended investments, meaning that there are a limited number of shares that can be issued by the company, when an investor invests in this type of fund they become a shareholder of this company.

A Real Estate Investment Trust is a company or a group that owns and manages property on behalf of shareholders. This type of investment allows consumers to invest in property without having to purchase a property themselves. These types of investments do not purchase or hold equities, so will not be discussed in this Report, but they are referenced in The Consumer section of the Report.

Stocks and Shares ISAs are a tax-efficient method of investing in a variety of different investments. It is possible to invest in individual stocks and shares, unit trusts, open-ended investment companies, investment trusts and government and corporate bonds. Unlike a cash ISA there is some risk carried with a stocks and shares ISA as a consumer’s money is invested and therefore is subject to market fluctuations.

Unit Trust Funds and Open-ended Investment Companies (OEICs) are collective investment products that allow multiple investors to pool their money to purchase a variety of different assets. Fund managers purchase a variety of shares, bonds, property and cash assets, and other investments to create a diverse portfolio for investors.

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Scope of this Report
        • Equity Release Council
        • Executive Summary

            • The market
              • Equity release sales grew by a third in 2016
                • Figure 1: Sales of equity release products, by volume and value, 2011-16
              • Maturity of interest-only mortgages will help equity release sales to kick on
                • Figure 2: Forecast value of new equity release schemes sold, 2011-21
              • Companies and brands
                • Big three lenders control 85% of the market
                  • Figure 3: Equity release market share, by value of new sales, 2015 and 2016
                • The consumer
                  • One in 10 over-45s expect to downsize
                    • Figure 4: Expected/actual sources of retirement income, February 2017
                  • Nearly a quarter of 60-64-year-olds still paying off mortgage
                    • Figure 5: Current outstanding debts, February 2017
                  • Around one in seven weighing up equity release schemes
                    • Figure 6: Consideration of equity release schemes, February 2015-February 2017
                  • Education can help to broaden appeal
                    • Figure 7: Attitudes towards equity release, February 2017
                  • What we think
                  • Issues and Insights

                    • The expectation of inheritance is dying out
                      • The facts
                        • The implications
                          • Peer power
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • Equity release sales grew by a third in 2016
                                  • Mortgage repayments push up plan values
                                    • Equity release buoyed by strong housing market
                                      • 40,000 interest-only mortgages maturing each year
                                        • The pension gaps
                                        • Market Size and Forecast

                                          • Equity release sales grew by a third in 2016
                                            • Figure 8: Sales of equity release products, by volume and value, 2011-16
                                          • Market forecast
                                            • Maturity of interest-only mortgages will help equity release sales to kick on
                                              • Brexit uncertainty contributing to house price slowdown
                                                • Figure 9: Forecast value of new equity release schemes sold, 2011-21
                                                • Figure 10: Forecast volume of new equity release schemes sold, 2011-21
                                                • Figure 11: Forecast value and volume of new equity release schemes sold, 2016-21
                                              • Forecast methodology
                                              • Market Segmentation

                                                • Two in three plans are drawdown
                                                    • Figure 12: Proportional distribution of new equity release sales, by product type, 2012-16
                                                  • Mortgage repayments push up plan values
                                                    • Figure 13: Average amount released, by product type, H1 2015-H2 2016
                                                • Market Drivers

                                                  • Equity release buoyed by strong housing market…
                                                    • Figure 14: Average house prices in the UK, January 2005-January 2017
                                                  • …but growth may have peaked
                                                    • Number of over-45s renting has soared in the past five years
                                                      • Figure 15: Housing tenure, by age of household reference person, England data 2010/11 and 2015/16
                                                    • 40,000 interest-only mortgages maturing each year
                                                      • The pension gaps
                                                          • Figure 16: Consumer agreement with statements regarding their pension, June 2016
                                                        • Equity release used to enjoy retirement as well as to service debt
                                                            • Figure 17: Reason for choosing equity release, 2011 and 2016
                                                          • Boundaries between equity release and mortgages becoming more blurred
                                                          • Companies and Brands – What You Need to Know

                                                            • Big three lenders control 85% of the market
                                                              • Brokers bolster advice services
                                                                • JRP Group rolls out new trading brand
                                                                  • Providers look to carve out a niche
                                                                  • Market Share

                                                                    • Big three lenders control 85% of the market
                                                                        • Figure 18: Equity release market share, by value of new sales, 2015 and 2016
                                                                      • Legal & General sales tripled in 2016
                                                                          • Figure 19: Top four equity release providers, by value of new sales, 2013-16
                                                                      • Competitive Strategies

                                                                        • Strong preference for face-to-face advice
                                                                          • Figure 20: Preferred sources of retirement income advice, February 2017
                                                                        • Brokers bolster advice services
                                                                          • JRP Group rolls out new trading brand
                                                                            • Legal & General lands with a bang
                                                                              • Room for more?
                                                                                • Providers look to carve out a niche
                                                                                  • Family affairs
                                                                                  • Advertising and Marketing Activity

                                                                                    • Total above-the-line expenditure rose by 80% in 2016
                                                                                      • Figure 21: Above-the-line, online display and direct mail advertising expenditure on equity release, 2012-16
                                                                                    • Leading brokers’ ATL spend doubled in 2016
                                                                                      • Figure 22: Above-the-line, online display and direct mail advertising expenditure on equity release, by advertiser, 2015 and 2016
                                                                                    • TV accounts for nearly half of ATL expenditure
                                                                                      • Figure 23: Above-the-line, online display and direct mail advertising expenditure on equity release, by media type, 2016
                                                                                  • The Consumer – What You Need to Know

                                                                                    • One in 10 over-45s expect to downsize
                                                                                      • Nearly one in three over-45s still paying off mortgage
                                                                                        • Around one in seven weighing up equity release schemes
                                                                                          • Education can help to broaden appeal
                                                                                            • Peer power
                                                                                            • Sources of Retirement Income

                                                                                              • One in 10 consumers expect to downsize
                                                                                                  • Figure 24: Expected/actual sources of retirement income, February 2017
                                                                                                • One in 20 home buyers to use equity release to fund retirement
                                                                                                  • Figure 25: Expected/actual sources of retirement income, by housing tenure, February 2017
                                                                                                • Aggregation could offer more transparency
                                                                                                    • Figure 26: Repertoire of expected/actual sources of retirement income, February 2017
                                                                                                • Debt Levels at Retirement

                                                                                                  • Nearly one in three over-45s are still paying off mortgage
                                                                                                    • Figure 27: Current outstanding debts, February 2017
                                                                                                  • Majority of homeowners are debt-free
                                                                                                      • Figure 28: Current outstanding debts, by housing tenure, February 2017
                                                                                                    • Only a quarter of people in largest households are debt-free
                                                                                                      • Figure 29: Current outstanding debts, by number of people living in household, February 2017
                                                                                                  • Financial Health in Retirement

                                                                                                    • 30% of over-45s feeling cautious or concerned
                                                                                                        • Figure 30: Financial health in retirement, February 2017
                                                                                                      • The next generation of retirees expect to be less comfortable
                                                                                                        • Figure 31: Financial health in retirement, by working status, February 2017
                                                                                                      • Thinking about life after death
                                                                                                        • Figure 32: Financial health in retirement, by marital status, February 2017
                                                                                                    • Consideration of Equity Release

                                                                                                      • Around one in seven weighing up equity release schemes
                                                                                                          • Figure 33: Consideration of equity release schemes, February 2015-February 2017
                                                                                                        • Mortgage owners more open to releasing equity
                                                                                                          • Figure 34: Consideration of equity release schemes, February 2017
                                                                                                      • Attitudes towards Equity Release

                                                                                                        • Education can help to broaden appeal
                                                                                                            • Figure 35: Attitudes towards equity release, February 2017
                                                                                                          • Expectation of inheritance is dying out
                                                                                                          • Sources of Retirement Income Advice

                                                                                                            • Peer power
                                                                                                              • Figure 36: Preferred sources of retirement income advice, February 2017
                                                                                                            • Equity release audience not shut off to technology
                                                                                                              • Figure 37: Preferred sources of retirement income advice, by consideration of equity release, February 2017
                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                              • Abbreviations
                                                                                                                • Consumer research methodology
                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                  • Additional best-case/worst-case forecast tables
                                                                                                                    • Figure 38: Best- and worst-case forecast for the value of new equity release schemes sold, 2016-21
                                                                                                                    • Figure 39: Best- and worst-case forecast for the volume of new equity release schemes sold, 2016-21
                                                                                                                  • Forecast methodology

                                                                                                                  Companies Covered

                                                                                                                  To learn more about the companies covered in this report please contact us.