The Office for National Statistics predicts that within the next 20 years, there will be 40% more over-65s in the UK. Not only will there be more of them, but they will also be living longer – some well into their 80s and 90s and potentially, 100s.

While age demographics increase, so too does an interest in products that allow for comfortable later life living. Pension provisions rarely suffice, with the average pension pot built over a lifetime totalling only £61,897. Combined with the state pension, this falls short of the minimum wage annually.

Increase demand in equity release

This disconnect between health and wealth is naturally causing homeowners to unlock money from property. Recent figures from the Equity Release Council show there was an 8% increase just between July and September 2019 of UK homeowners over the age of 55 choosing to release equity in this way.

The increasing demand is certainly forcing the industry to take note, but with this comes many technicalities and complications. We are now seeing products for those in sheltered and age-restricted homes, retirement interest-only mortgages, downsizing protection, inheritance guarantees and drawdown.

Sunday newspapers are featuring advertisements that offer to “make your retirement more comfortable” and is this any wonder? Not so long ago we were reading about pensions and investments but now the focus is on using the home to fund retirement.

So what are people spending their newly unchained money on? Research from Canada Life showed that 41% of those freeing up cash from their properties in Q3 of 2019 are using it for home improvements, 21% for holidays and 12% to make gift contributions to family members. Interestingly, nearly a quarter of equity release customers (23%) use the money to pay off unsecured debt.

Retirement solutions

Equity release is playing an increasing role in people’s financial futures, in the same way that pension savings have traditionally. It is becoming mainstream, and a core part of an evolving retirement solution. The shortfall has to be made up somewhere.

As the need is so abundantly clear, how are we keeping up as an industry? What do we need to do to match up with client needs? Interest rates on equity release products are becoming more competitive, falling below 5% last summer, with 21% of products priced at 4% or lower. How do we ensure that our clients are equipped to make the right choices when navigating the baffling array of products and services? We do this by developing our specialist knowledge.

CeRER qualification

The updated Certificate in Regulated Equity Release (CeRER) from The London Institute of Banking & Finance was developed in consultation with the Equity Release Council, UK Finance, and major high-street banks and lenders. It addresses the changing market and changing consumer needs, while helping advisers to meet the ever-growing needs that a complex sector creates.

We’ve worked closely with the industry to ensure that our CeRER qualification – and the knowledge it provides – remains up to date and fit for purpose. So how does it differ from the last one?

We’ve increased our topics from three to six. This has enabled us to incorporate broader and more detailed coverage of lifetime mortgages. We have also improved our teaching in relation to vulnerable customers, powers of attorney and complaint handling.

The wonderful thing about working in financial services is that it is always evolving and there are always opportunities to keep learning. Our job is to help ensure that advisers have the knowledge and skills they require to be able to do their job, and to do it well.