Equity release - Accessing housing wealth in retirement
A new report by Towers Watson published 10th June 2013 analyses the market for equity release products, which is expected to grow across Europe – with the potential for over €20 billion to be released each year. However, the current Solvency II requirements may stifle the supply of these products from insurers. Action needs to be taken immediately to ensure a sensible treatment of equity release products in the new regulation, the report concludes.
Across Europe there is growing concern that the costs of providing for the ageing population will be prohibitive. The number of people aged 65 and over in Europe is estimated to exceed 120 million by 2030 and the proportion of the younger population supporting them is expected to decline. Given the changing demographic profile across Europe, public finances in European countries will struggle to support current, or future, levels of pensioner needs.
For most people, their house is the most significant investment they will make over their lifetime. Many elderly people now hold a large amount of wealth in their property, making them asset rich, but cash poor. Equity release products are a viable option to access this wealth, the report states.
The full report can be found here.