UK Equity Release Schemes Market Report 2024
The cost of living crisis continues to place pressure on household finances and has made consumers more cautious about borrowing against the value of their homes.
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Executive Summary
- Opportunities for the equity release market
- Equity release schemes have potential for expansion
- Help potential consumers understand equity release
- Despite high interest rates, there are opportunities to engage consumers
- Market dynamics and outlook
- Market size & forecast
- Market predictions
- Equity release sales are expected to recover from 2025
- Equity release sales expected to remain subdued in 2024
- Graph 1: value and volume of new sales of equity release products, 2020-24
- Equity release providers saw their sales decreasing in 2023
- What consumers want and why
- Equity release schemes remain a niche consideration for retirement funding
- Only a minority are very confident in affording their desired lifestyle throughout retirement
- Graph 2: confidence in affording the desired lifestyle throughout retirement, 2024
- Interest in equity release schemes remains stable
- Supplementing retirement income is the main reason for using equity release schemes
- Graph 3: main reasons for using equity release schemes, 2024
- Reluctance to diminish home equity is a significant barrier to equity release schemes
- No negative equity guarantees have strong appeal
- Graph 4: important features of equity release schemes, 2024
- Equity release schemes are perceived as confusing
- Innovation and marketing
- Competitive strategies and launch activity
- Major decline in equity release scheme advertising expenditure
- Graph 5: total above-the line, online display and direct mail advertising expenditure on equity release, 2019/20-2023/24
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Market Dynamics
- Market size
- Equity release sales expected to continue to decline in 2024…
- Graph 6: value of equity release schemes sold, 2020-24
- …alongside reduced volume of new plans
- Graph 7: volume of new sales of equity release products, 2020-24
- Market forecast
- Equity release sales are expected to recover from 2025…
- …with a similar trend forecast for new sales volume
- The equity release market is forecast to return to growth over the next five years
- Learnings from the last income squeeze
- Graph 8: value and volume of new equity release schemes sold, 2006-14
- Market segmentation
- Returning drawdown plans saw a smaller decline than new equity release plans
- Graph 9: volume of new equity release sales, by type of activity, 2021-23
- Drawdown schemes regained popularity
- Graph 10: proportional distribution of new equity release sales, by product type, 2019-23
- Average amount accessed declined for new lump sum and drawdown lifetime mortgages
- Graph 11: trends in average amounts of property released for new lump-sum and new drawdown initial sum lifetime mortgages, 2020-24
- Market share
- Equity release providers saw their sales decreasing in 2023
- Macro-economic factors
- Economic output has stagnated since the cost of living crisis began
- Graph 12: GDP, 2021-23
- Falling inflation has reduced pressure on household finances…
- Graph 13: CPI inflation rate, 2021-24
- …but most people are still feeling the effects of higher prices
- Graph 14: cost of living related issues noticed in the last two months, 2024
- Financial wellbeing remains fragile
- Graph 15: the financial wellbeing index, 2016-24
- Equity release interest rates increase
- Graph 16: average interest rates for equity release plans taken out, 2019-23
- Social factors
- UK’s greying population provides an opportunity for the equity release market
- Graph 17: UK population projections, 2023-2053
- Homeownership is decreasing among those under 65
- Graph 18: % of households who own their homes outright, by age groups, 2003/04-2022/23
- Graph 19: % of households who own their homes with a mortgage, by age groups, 2003/04-2022/23
- Average UK house prices fluctuate
- Graph 20: average UK house price, 2015-24
- Equity release funds primarily used for repaying debt
- Graph 21: proportion of equity release funds, by use of equity release, 2022-23
- Legal factors
- FCA’s Consumer Duty comes into effect
- The FCA publishes review on later life mortgages
- Equity Release Council updates standards
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What Consumers Want and Why
- Sources of retirement funding
- Private and state pensions are the main sources of income in retirement
- Graph 22: expected sources of retirement funding, 2024
- 45-54s are less likely to expect to rely on the state pension or private pensions
- Graph 23: state and private pensions as expected/actual sources of retirement funding, by age groups, 2024
- The majority of 45-54s lack confidence in their retirement savings
- Property wealth remains a largely untapped resource in retirement planning
- Equity release schemes remain a niche consideration
- Graph 24: equity release as expected/actual source of retirement funding, by age groups, 2024
- Over-45s exploring multiple sources of retirement income show greater interest in equity release
- Graph 25: equity release as expected/actual source of retirement funding, by repertoire analysis of sources of retirement income, 2024
- Financial confidence in retirement
- Only a minority are very confident in affording the desired lifestyle throughout retirement
- Graph 26: confidence in affording the desired lifestyle throughout retirement, 2024
- 45-54s are less confident they will sustain desired retirement lifestyles
- Graph 27: confidence in affording the desired lifestyle throughout retirement, by age groups, 2024
- Help women boost retirement confidence
- Home ownership increases confidence
- Graph 28: confidence in affording the desired lifestyle throughout retirement, by housing situation, 2024
- Consideration of equity release schemes
- Interest in equity release schemes remains stable
- Graph 29: consideration of equity release schemes, 2024
- Consideration of equity release schemes is higher among workers…
- Graph 30: consideration of equity release schemes, by employment, 2024
- …and those with less than ideal finances
- Graph 31: consideration of equity release schemes, by financial situation, 2024
- Lack of confidence in retirement boosts equity release consideration
- Graph 32: consideration of equity release, by confidence in affording the desired lifestyle throughout retirement, 2024
- Reasons for using equity release schemes
- Supplementing retirement income is the main reason for using equity release schemes
- Graph 33: main reasons for using equity release schemes, 2024
- Home improvements would drive more than a quarter of over-45s to use equity release
- Barriers to equity release schemes
- Reluctance to diminish home equity is a significant barrier to equity release schemes
- Graph 34: barriers to equity release schemes, 2024
- Shift perceptions on later life loans
- Concerns over inheritance impact equity release consideration
- Important features of equity release schemes
- Strong appeal for no negative equity guarantees
- Graph 35: important features of equity release schemes, 2024
- Flexible equity release features are also appealing…
- …as well as flexible repayment options
- Behaviours towards equity release schemes
- Equity release schemes continue to be seen as a last resort
- Graph 36: behaviours towards equity release schemes, 2024
- Equity release schemes are perceived as confusing
- Higher interest rates impact the appeal of equity release schemes
- Graph 37: selected behaviour towards equity release schemes, by consideration of equity release schemes, 2024
- Improve understanding to boost trust in equity release providers
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Innovation And Marketing Trends
- Competitive strategies and launch activity
- Royal London acquires the Responsible Group
- LV= launches new ‘Lifestyle’ range to offer more flexibility
- Legal & General Home Finance launches lifetime mortgage for over-50s
- Key Groups enhances its offering
- Standard Life launches interest reward lifetime mortgage
- Advertising and marketing activity
- Significant decline in advertising expenditure on equity release schemes
- Graph 38: total above-the line, online display and direct mail advertising expenditure on equity release, 2019/20-2023/24
- Age Partnership remains the largest advertiser
- Key increases advertising spend
- TV advertising remains key but digital gains traction
- Graph 39: UK proportional distribution of above-the line, online display and direct mail advertising expenditure on equity release, by media type, 2021/22-2023/24
- SunLife boosts adspend
- Aviva focuses on direct mail
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Appendix
- Supplementary data
- Top five advertisers on equity release
- Top five advertisers and media type
- Market forecast data and methodology
- Market size: underlying data
- Market forecast and prediction intervals (value)
- Market forecast and prediction intervals (volume)
- Forecast methodology
- Report scope and definitions
- Market definition
- Equity Release Council
- Abbreviations and terms
- Methodology
- Consumer research methodology
- Nielsen Ad Intel coverage
Stay ahead of the curve and secure future growth for your business with Mintel’s UK Equity Release Schemes Market. Get a 360° view of the UK equity release market including market size, share and forecasted growth to help you align your business strategy with the needs of your audience.
This Report Looks at the Following Areas:
- Analysis of the market performance, including a five-year forecast.
- Analysis of sources of retirement income and consideration of equity release schemes.
- Reasons for considering equity release schemes.
- Barriers to consideration of equity release schemes.
- Behaviours towards equity release schemes.
- Analysis of competitive strategies, launch activity and advertising initiatives.
UK Equity Release Market – Current Landscape
The cost of living crisis continues to place pressure on household finances and has made consumers more cautious about borrowing against the value of their homes. This heightened caution, combined with high interest rates, has already resulted in a slowdown in the equity release market, and this trend is likely to continue as long as economic uncertainties persist.
- UK equity release market size: After a record-breaking £6.2bn in lending in 2022, 2023 was a challenging year for the UK equity release market as total lending declined by 58%, according to the Equity Release Council (ERC).
- UK equity release market share: Leading providers such as Key Group, Aviva, and Legal & General, all reported declines in their equity release sales, highlighting the extent to which 2023 was a particularly tough period for the industry.
UK Equity Release Market – Consumer Trends
In addition to macroeconomic factors, the equity release sector faces additional challenges due to consumer apprehensions. Among these are worries about reducing how much of their home they own alongside the financial burden of taking out loans during their later years. In addition, a lack of trust in equity providers to act in consumers’ best interests can deter people from exploring equity release as a viable retirement funding option.
Despite these challenges, equity release schemes have potential for expansion. Among homeowners over 45, 22% would consider equity release to help fund their retirement, with interest increasing to 34% among those aged 45-54. This opens a window for providers to offer clear, comprehensive information early on, targeting those yet to finalise their retirement plans.
Purchase the full report for a complete overview of the UK equity release market, including market dynamics and comprehensive consumer analysis from Mintel’s industry experts. Readers of this report may also be interested in Mintel’s UK Retirement Planning Market Report.
More About This Report
For the purposes of this report, Mintel has used the following definitions:
Equity release is a way of accessing the wealth tied up in a property without the need to move. With equity release, homeowners can either borrow against the value of their home (a lifetime mortgage) or sell all or part of it (using a home reversion plan) in return for a regular monthly income, a lump sum or the facility to access equity as and when they choose to (drawdown), or a combination of these options. As lifetime mortgages now account for the vast majority of equity release plans sold, the terms lifetime mortgage and equity release are used interchangeably throughout this report.
To be eligible for equity release, homeowners must meet the following criteria:
- Be aged 55 or over (or 60+ for home reversion plans); for joint plans the youngest borrower must be at least 55
- Own their property outright, or in some instances, have a small outstanding mortgage
- The property must be in England, Scotland or Wales, and valued at more than £70,000
Meet The Expert Behind The Analysis
This report was written by Stefania Apostol, Senior Financial Services Analyst at Mintel. Stefania joined the Financial Services Reports team in March 2021, having previously worked for Mintel’s MFD, Disruptor and GNPD products. In her current role, she researches and writes Mintel Reports on consumer financial services in the UK.
While many challenges persist, there are opportunities to engage consumers, enhance understanding, and build trust.
Stefania Apostol
Senior Financial Services Analyst
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