BLOG: Adapting To Unprecedented Circumstances

It’s safe to say that we’re currently living in unprecedented and changeable times, and it’s easy to be pessimistic about what the future may hold for the wider market in both the short-term and long-term future. However, it’s worth considering the resilience the market has shown in recent years in the face of other challenges, and the way it’s held up under a changeable backdrop.

Last year ongoing political and economic uncertainty left many consumers within the wider financial services sector cautious and tentative about making major life decisions when it came to their finances, and the retirement planning industry was no different. Nonetheless, the equity release market recorded 10% year-on-year growth during Q1 of 2019, and despite external factors starting to bite, consumer confidence ultimately stabilised and maintained similar levels to those seen during the market’s breakout 2018.

A lot the market’s resilience can be attributed to its ongoing dedication to providing innovative product solutions and adapting to customer needs in order to provide products that offer them the flexibility to enjoy their retirement in the manner they desire. This increased competitiveness saw a 95% year-on-year increase on the number of plans available to consumers, averaging out at a new product appearing in the market once every 48 hours, and culminating in a rise from 161 products for 2018’s full term to 314 by the end of October 2019.

In addition to a widening of available products, the market’s ongoing quest to continue delivering retirement solutions to its customers has also seen a significant drop in rates and by late last year the average rate across the market had fallen below 5% for the first time ever. In addition, the market has reacted to changing customer needs by introducing increasing numbers of products with enhanced features including repayments options, downsizing protection, and lending on age-restricted properties.

That thinking has characterised our product development over the past twelve months or so, with our Heritage range offering whole-of-market ERC-free repayments from launch, and then adding in a raft of enhancements since. These have included reducing the minimum borrower age to 55 on both single and joint lives plans, expanding acceptable flat roof and acreage levels, and allowing lending on age-restricted and sheltered accommodation. Similarly, our Sovereign range has benefited from being simplified for the benefit of customers and advisers alike, with a new bespoke series of plans aimed at the rising numbers of borrowers from the higher end of the property market.

In addition, in reaction to the ongoing situation we’ve worked with our funders to be able to introduce desktop valuations on a number of products. Featuring slightly-reduced LTVs compared to standard full valuation products, the new offerings (available on our Sovereign and Heritage ranges) support customers seeking to quickly release housing equity who may not be in a position to sit back and wait for ongoing restrictions to be lifted. We remain dedicated to exploring innovative solutions – both product-based and technological – to enable our advisers and customers to continue transacting with us and accessing the retirement solutions they need. Our mantra of ‘service made possible through technology, made meaningful by people’ that last year saw us launch the market’s first adviser-facing mobile app, is now being used to find effective workarounds to this unprecedented situation.

We, as a sector, are likely to witness a continued period where we’ll have to think on our feet to continue finding solutions to these unforeseen circumstances, but if the past couple of years have demonstrated anything it’s our collective ability to rise to the challenge. With many UK over-55s looking into the future with uncertainty, we have a responsibility to be on hand to provide them with a retirement solution, should equity release ultimately be their preferred option. We at Pure Retirement continue to be dedicated to serving our customers – both new and existing – and we’re sure it’s a sentiment shared by the wider sector.

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