Life expectancy disparity leads to debate on postcode-based products

Figures from the Office for National Statistics show wide disparity in life expectancy for 65 year olds across the country, which will have implications for the quity release market, reports Mortgage Solutions (27/11/06).

Men aged 65 can expect to live 16.6 years and women 19.4, however, regional variations show that in Kensington and Chelsea men expect to live to 82.2 while in Glasgow it is 69.9.

Some providers already offer deals on impaired lives.

Jon King, chief executive of Safe Home Income Plans, said “I am not aware of an annuity that pays more on postcode. You need an impairment to have an impact on loan-to-value rates. The same surely should apply for equity release products. It is not possible to devise products on a postcode basis.”

Stonehaven move into equity release

A new equity release provider has rolled out its range, reports Financial Adviser (23/11/06).

Stonehaven caught attention in August when it piloted new products such as build-your-own and flexible cash release.

Following a successful pilot, Stonehaven was approved by Safe Home Income Plans in November.

The equity release market is thought to be worth £1.4bn a year, of which £800m comes through intermediaries.

Jayne Almond, Stonehaven’s chief executive officer, said “It is an exciting time for the market. Attitudes towards inheritance are quickly changing. We want to grow consumer confidence in equity release products and ensure advisers are well placed to confidently advise products.

The flexible cash release product provides a drawdown facility. It can be taken either in a lump sum or as regular payments. The build-your-own product enables the adviser to develop a bespoke product.

Equity release from high value property is a ‘lifestyle’ choice

Industry figures have reported an increasing number of equity release transactions taking place on higher value properties, reports Mortgage Solutions (20/11/06).

Michael Philps of Hinton & Wild said it had seen a definite increase in higher value properties being used for equity release. “It is not £200,000 or £250,000 anymore. It is real lifestyle type customers rather than desperation sales these days. They do not have to take out equity release but, for whatever reason, they choose to.”

Customers are becoming more aware of the inheritance tax burden while others simply wanted to provide their beneficiaries with money while they were still alive.