Equity Release – Client Profile Update

Welcome back loyal readers and new readers alike.

As any business – we at Berkeley Consultants analyse all available client data. I have just completed a review of all our the new customers using our specialist advice to secure their Equity Release borrowing during the last quarter in 2011. Here is a summary of the results:-

Stressed Purchase (those who wished to stay in their homes and had no other way of raising funding) = 32%

Home Improvements                                                                                                                                                 =   9%

Gift to relatives (Mostly children and grand children for business or house buying assistance)               = 26%

IHT Planning (why give the taxman more money unnessarily)                                                                                                                                                                  = 17%

Luxury Items (mostly holiday purposes inc. overseas property, new car etc)                                                = 3%

Health Care (private health operations and funding long term care)                                                               = 7%

Debt Consolodation                                                                                                                                                     = 19%

 

I reckon if we had presented these various ER uses to any modern day economist he/she would have projected with good accuracy given the current hard times pensioners have been forced to endure.

Now lets have a look at the data for the last quarter 2008(pre-credit crunch) and I will invite you to draw your own conclusions on a postcard – crikey showing my age now or what? Okay feed back through the site then?

 

Stressed  Purchase         = 12%

Home Improvements    = 22%

Gift to Relatives              = 3%

IHT Planning                  = 21%

Luxury Items                  = 19%

Health Care                    = 14%

Debt Consolodation      = 9%

 

 

The obvious conclusion is the swing from luxury items to stressed purcase – a clear indication of the decline in the economy and how pensioners have been forced to change their lifestyles.

Some good news now – The 3 main ER lenders Aviva, Just Retirement and LV have recently reduced their interest rates with two of them also offering free valuations. For full details or a proper illustration – drop us an email.

DC (I DONT MEAN THE EX f1 DRIVER) and his motley crew must be thanking their luck stars for the existence of equity release schemes. Clearly these products are more and more under-pinning reduced pension income and the higher cost of living that those in retirement have had thrust upon them. Many pensioners have had to swap the golf course for a return to the work place – deep joy! Furthermore, its now become less possible to help family through difficulties as no 1 needs looking after.

I wonder if there is a medium/long term plan from our illustrious leaders to resolve this crisis – I suspect not.

Anyway, lets try to think positively in the face of such adversity – email me with any comments.

 

Best regards and bye for now!

 

Glen J Morris

Director