Providers have warned of an explosion in demand for equity release products as a wave of borrowers approaching retirement find their mortgage endowment policies are insufficient to pay off their mortgages.
Just Retirement and Partnership have warned of a huge rise in demand for the products over the next five years, as savers who took up endowment policies when they were first introduced face up to a funding shortfall. Just Retirement marketing director Steve Lowe (pictured) said: ‘It’s quite possible that this parallel, hidden equity release market could dwarf the visible market.’
Beckenham-based adviser Dhan Sharma of Maze Wealth, said savers in that position were too young to be using equity release products, warning it would impact on their ability to draw down money later in life. ‘When endowments are maturing, these people will be 60 or 65 years old, which is still young to use equity release,’ said Sharma. ‘The debt increases over time and the client may need money to draw down in later life.’