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Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Equity Release Schemes market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in 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 get at equity as and when they like (drawdown) or a combination of these options.

As lifetime mortgages now account for more than 99% 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 very small outstanding mortgage
  • The property must be in England, Scotland or Wales, and valued at more than £70,000

Expert analysis from a specialist in the field

Written by George Zaborowski, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The equity release market has grown strongly over the past several years, and prospects for further growth remain favourable despite the recent slowdown in the housing market. However, in order for the market to reach its full potential, more still needs to be done to address misconceptions that a significant minority of the target market continue to have about fundamental aspects of the product George Zaborowski
Senior Financial Services Analyst

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What's included

What's included

Table of contents

Table of contents

  1. Overview

      • Products covered in this Report
        • Equity Release Council
        • Executive Summary

            • The market
              • Equity release lending nearly hits £4 billion in 2018
                • Figure 1: Forecast value of new equity release schemes sold, 2013-23
              • Companies and brands
                • Legal & General maintains its dominance
                  • Figure 2: Equity release market share, by percentage of new sales values, 2017 and 2018
                • Surging market growth boosts product development activity
                  • Adspend nearly doubles in 2018/19
                    • Figure 3: Total above-the line, online display and direct mail advertising expenditure on equity release, Year to end of February, 2015-19
                  • The consumer
                    • Just 1% of those aged 45+ use or plan to use equity release
                      • Figure 4: Expected/actual sources of retirement income, 2018 and 2019
                    • Two in five describe their financial situation at retirement age as healthy
                      • Figure 5: Financial situation at retirement age, February 2019
                    • Interest in equity release falls to a new low in 2019
                      • Figure 6: Consideration of equity release, February 2019
                    • One third of homeowners claim a good understanding of equity release
                      • Figure 7: Familiarity with equity release, February 2019
                    • Many still have misconceptions about equity release
                      • Figure 8: Equity release product knowledge, February 2019
                    • Obtaining a lump sum payment is most likely to be viewed as a key benefit
                      • Figure 9: Perceived benefits of equity release, February 2019
                    • Equity release still widely viewed as a last-ditch option
                      • Figure 10: Agreement with statements about equity release, February 2019
                    • What we think
                    • Issues and Insights

                      • Lack of knowledge a key factor hindering interest in equity release
                        • The facts
                          • The implications
                            • Equity release – a supplement to poor annuity rates
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Equity release sales near the £4 billion mark in 2018
                                    • 65% of new business is driven by drawdown plans
                                      • Average drawdown plan values stagnate while lump-sums decline
                                        • House price growth has slowed to a six-year low
                                          • PRA delays introducing new equity-release regulation by one year
                                          • Market Size and Forecast

                                            • Equity sales reach £3.9 billion in 2018…
                                              • …but growth slows as housing market stalls
                                                • Figure 11: New sales of equity release products, by volume and value, 2012-18
                                              • Healthy growth expected to continue over the next five years
                                                • Figure 12: Forecast value of new equity release schemes sold, 2013-23
                                                • Figure 13: Forecast volume of new equity release schemes sold, 2013-23
                                                • Figure 14: Forecast value and volume of new equity release schemes sold, 2018-23
                                              • Forecast methodology
                                              • Market Segmentation

                                                • 56% of all equity release market activity driven by new sales
                                                  • Figure 15: Volume of equity release customers by type of activity, 2017-18
                                                • Drawdown accounts for two thirds of new business volumes
                                                  • Figure 16: Proportional distribution of new equity release sales, by product type, 2013-18
                                                • Average lump-sum value falls to lowest level in two years
                                                  • Figure 17: Average amount released by product type, H1 2017-H2 2018
                                              • Market Drivers

                                                • Greying of UK population working in the favour or equity release
                                                  • Figure 18: Expectation of life for those aged 65 in each year, period principal projection, UK, 1981-2066
                                                • Annual house price growth has slowed to a 6-year low
                                                  • Figure 19: Average house prices in the UK, by country, January 2006-January 2019
                                                • Homeownership is in decline among over-45s…
                                                  • …but more people are taking mortgage debt into retirement
                                                    • Figure 20: Housing tenure, by age of household reference person, England data 2008/09 and 2017/18
                                                  • The number of equity release deals available has expanded rapidly
                                                    • Figure 21: Number of equity release deals and select details about rates and fees, February 2014-February 2019
                                                • Regulatory and Legislative Changes

                                                  • PRA postpones introduction of new equity release regulation
                                                    • Retirement interest-only mortgages reclassified as standard mortgages
                                                      • Pensions Dashboards set to become available in 2019
                                                      • Companies and Brands – What You Need to Know

                                                        • Market share dominance of top players in decline
                                                          • Surging market growth boosts product development activity
                                                            • Equity release above the line adspend rises sharply
                                                            • Market Share

                                                              • ‘Big three’ lenders’ grip on the market is loosening
                                                                • Figure 22: Equity release market share, by percentage of new sales values, 2017 and 2018
                                                              • Legal & General the market leader with over £1 billion in lending in 2018
                                                                  • Figure 23: Equity release market share, by value of top provider new sales, 2013-17
                                                              • Competitive Strategies

                                                                • Rapid market growth has led to a flurry of new product launches
                                                                  • Well-known brands helping move equity release into mainstream
                                                                    • Standard Life partners with Age Partnership to re-enter the market
                                                                      • Openwork pilots a new lifetime mortgage product
                                                                        • Legal & General planning an in-house equity release advice service
                                                                          • Pure Retirement allies with Nationwide on origination and servicing
                                                                            • Enhanced flexibility and control the key goal of product development
                                                                              • L&G incorporates greater flexibility into its product line-up, including monthly income option
                                                                                • Saga launches new Regular Drawdown Lifetime Mortgage
                                                                                  • Just introduces plan with option to reduce roll up of interest
                                                                                    • Responsible Lending plan encourages more efficient drawdown activity
                                                                                      • OneFamily partners with US firm to launch high LTV lifetime mortgage
                                                                                        • Canada Life introduces new plan with enhanced flexibility
                                                                                          • Aviva bolsters its equity release offering
                                                                                          • Advertising and Marketing Activity

                                                                                            • Above the line adspend skyrockets
                                                                                              • Figure 24: Total above-the line, online display and direct mail advertising expenditure on equity release, Year to end of February, 2015-19
                                                                                            • Key Retirement is the leading advertiser
                                                                                              • Figure 25: Top five advertisers of above-the line, online display and direct mail advertising expenditure on equity release, Year to end of February, 2017-19
                                                                                            • TV advertising accounts for two-fifths of adspend
                                                                                              • Figure 26: Total above-the-line, online display and direct mail advertising expenditure on equity release, by media type, Year to end of February 2019
                                                                                            • Nielsen Ad Intel coverage
                                                                                            • The Consumer – What You Need to Know

                                                                                              • Just 1% of over-45s use or plan to use equity release
                                                                                                • Two fifths describe their financial situation in retirement as healthy
                                                                                                  • Just one in 10 homeowners would consider equity release
                                                                                                    • One in three claims to have a good understanding of equity release
                                                                                                      • More still needs to be done to fight against product misconceptions
                                                                                                        • The ability to extract lump sum payment most commonly cited benefit
                                                                                                          • Many still view equity release as an option of last resort
                                                                                                          • Sources of Retirement Income

                                                                                                            • Only 1% of over-45s use or expect to use equity release
                                                                                                              • Property is not widely associated with retirement planning
                                                                                                                • Figure 27: Expected/actual sources of retirement income, 2016-19
                                                                                                              • Most use or plan to use just one or two retirement funding resources
                                                                                                                • Figure 28: Repertoire of expected/actual sources of income, February 2019
                                                                                                            • Financial Confidence in Retirement

                                                                                                              • Two in five describe their retirement finances as healthy
                                                                                                                • Figure 29: Financial situation at retirement age, February 2019
                                                                                                              • Owning property gives people a back-up plan and boosts confidence
                                                                                                                • Figure 30: Financial situation at retirement age, by housing situation, February 2019
                                                                                                              • Under-65s are the least confident
                                                                                                              • Consideration of Equity Release

                                                                                                                • Consideration drops as only one in 10 homeowners says they are open to equity release
                                                                                                                  • Uncertainty about house prices undermines confidence
                                                                                                                    • Disconnect between intentions and reality
                                                                                                                      • Figure 31: Consideration of equity release, 2015- 2019
                                                                                                                    • Those with children more open to equity release
                                                                                                                      • Figure 32: Consideration of equity release, by presence of children, 2015- 19
                                                                                                                  • Familiarity with Equity Release

                                                                                                                    • A third claim to have a good understanding of equity release
                                                                                                                      • Figure 33: Familiarity with equity release, February 2019
                                                                                                                    • Few homeowners have sought professional retirement planning advice
                                                                                                                    • Equity Release Product Knowledge

                                                                                                                      • Widespread knowledge about key features is still lacking
                                                                                                                        • Figure 34: Equity release product knowledge, February 2019
                                                                                                                      • Familiarity helps boost product knowledge, but misconceptions remain
                                                                                                                        • Figure 35: Equity release product knowledge, by familiarity with equity release, February 2019
                                                                                                                    • Perceived Benefits of Equity Release

                                                                                                                      • Lump sum payment most commonly viewed benefit of equity release…
                                                                                                                        • …but one in five highlights option for regular income
                                                                                                                          • Figure 36: Perceived benefits of equity release, February 2019
                                                                                                                        • Funding long-term care and helping family top uses of funds
                                                                                                                        • Attitudes towards Equity Release

                                                                                                                          • Half of homeowners think equity release is an option of last resort
                                                                                                                            • Figure 37: Agreement with statements about equity release, February 2019
                                                                                                                          • Younger homeowners tend to have more favourable views
                                                                                                                            • Equity-release success stories can help improve product perception
                                                                                                                              • Figure 38: Agreement with statements about equity release, by familiarity with equity release, February 2019
                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                  • Additional best-case/worst-case forecast tables
                                                                                                                                    • Figure 39: Best- and worst-case forecast for the value of new equity release schemes sold, 2018-23
                                                                                                                                    • Figure 40: Best- and worst-case forecast for the volume of new equity release schemes sold, 2018-23
                                                                                                                                  • Forecast methodology

                                                                                                                                  About the report

                                                                                                                                  This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                                  • The Consumer

                                                                                                                                    What They Want. Why They Want It.

                                                                                                                                  • The Competitors

                                                                                                                                    Who’s Winning. How To Stay Ahead.

                                                                                                                                  • The Market

                                                                                                                                    Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                                  • The Innovations

                                                                                                                                    New Ideas. New Products. New Potential.

                                                                                                                                  • The Opportunities

                                                                                                                                    Where The White Space Is. How To Make It Yours.

                                                                                                                                  • The Trends

                                                                                                                                    What’s Shaping Demand – Today And Tomorrow.

                                                                                                                                  Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

                                                                                                                                  Description