Prudential announced last Friday that they are to exit the Equity Release marketplace early next year in order to concentrate on their core areas of business. So what does this mean for the market as a whole? For Aviva and Just Retirement, who are two major players in this area, they are likely to see this as a bonus for them given they have expressed their intention to stay right where they are.  For the consumer it means there are a reduced choice of products on offer.

However, while Prudential were a leading provider in this area, their products rarely had the most competitive interest rates nor did they give the highest amount of equity when compared to other provider’s deals – so I do not believe that the market has been severely damaged. In fact Prudential’s market share this year has been only 12% (Source FT.com).

The rationale behind this move may be down to the length of time it takes a company to realise their gain when providing an Equity Release loan. Prudential have evidently decided that they need to make quicker profits and there are many more retirement products they offer that can achieve this. I believe in the future Prudential will re-enter the market once they deem it financially viable, but in the mean time for all the other companies still offering Equity Release it seems they will have an increased level of business during Prudential’s extended ‘holiday’.

If you have taken Equity Release with Prudential, fear not, you will continue to receive the excellent service they have always provided, and your agreement will not be effected in anyway.

By Martin Chrimes – Consultant at Equity Release by Vale

According to statistics from Credit Action, there are a large percentage of retired individuals who still hold some form of debt.

When reading through these statistics they claim Scottish Widows have estimated 1 in 6 retired people still have a Mortgage balance, with an average amount of £50,100 outstanding.  They also described many are ‘in the red’ with personal loans and credit cards, with an average balance of £7344. If this is the case then i’m sure many could potentially benefit from Equity Release to consolidate the debt, free up income and hopefully lead to an improved retirement.

Obviously it will not be suitable for everyone out there, but for those who are asset rich and income poor it may well make sense for them to look into Equity Release Schemes.

By Martin Chrimes – Consultant at Equity Release by Vale

The last 10 years have seen a remarkable change in the amount of people opting for Equity Release to provide cash, and also a much needed change in the Schemes and Plans themselves.

For one, back in the late 90’s and even the start of the 21st century, the products available tended to have higher interest rates (meaning an increased erosion of the equity in the property), and fewer safeguards for the consumer. It’s factors like these that have earnt Equity Release a poor reputation in the past.

A prime example of a safeguard is the ‘No Negative Equity’ guarantee.  This guarantee is attached to all schemes from providers that are members of SHIP (Safe Home Income Plans) and essentially means that if the price of the house is lower than the total outstanding debt on the Equity Release loan when it comes to be repaid – there is no debt left to the estate.  A great benefit i’m sure you will agree.  There are other benefits that SHIP approved Equity Release schemes provide and these are detailed on Vale’s Equity Release Comparison Page.

Evidently the providers and the products they bring to market have made giant leaps forward in the last few years and innovation has been well received.

Due to these changes you could argue that the poor reputation that Equity Release has gained in previous years, is now slowly being shrugged off. Rightfully so too, as the current schemes available today are a far cry from what was around in the past.

Overall I believe it is correct to say Equity Release has not only become a safer choice for many, but also a more attractive option for those looking to provide extra cash and/or an income in retirement.

By Martin Chrimes – Consultant at Equity Release by Vale

Equity Release by Vale have launched their own News Blog. Here we aim to provide articles related to the Equity Release industry, and how it affects individuals who are considering these types of schemes.

With Equity Release becoming more and more popular we feel that information on this area is vital to anyone thinking of obtaining cash for this way.