Issue no.5 January 2018
L I F E T I M E M O RTG AG E
INSIGHT Retirement Included in this issue
The future for retirement
The evolving role of equity release
By Paul Carter, CEO, Pure Retirement
By Rob Miles Head of IFA Sales, Legal & General
Spotlight on Lasting Power of Attorney
for health & welfare By Adam Stretton, Director, The Right Will & Estate Planning
850,000 2017 1 million 2025 2 million 2051
Retirement
people with dementia
Page 6
Page 10
Page 15
Please note any information in this magazine is for registered intermediaries and NOT to be issued to members of the public.
Welcome
To our January 2018 edition
If 2017 is anything to go by then 2018 is going to be a very busy year. The high street now offering lifetime mortgages will only improve consumer confidence in the product providing scope for life changing events for the older borrowers. Hopefully the stigma that once sat with equity release has finally changed as the products have improved and older clients are wanting to borrow against the home using a lifetime mortgage. Notice lifetime is used as you have flexibility to service interest on some schemes throughout their lifetime now and it better describes what the product is and sits better than equity release which was that horrible thing that everyone hated. The new Buy to Let mortgage alongside the second home schemes gives new opportunities for advisers to enter a new market that was not available in the past. I am sure we will look back in years to come and remember these times as the ones that changed the mind set of equity release and gave the LATER LIFE mortgage GOOD street creditability. Innovative and creative for borrowing, income, tax and trusts. This Newsletter is designed to share with all sectors of the industry, product providers, support staff and advisers keeping everyone informed of the current market, so feel free to please pass on to those you think may benefit. Our special thanks to Pure Retirement and their marketing team, who pull the articles together to create the newsletter. I hope you think it is informative, and if you have any suggestions then please let us know. Please enjoy the read and pass it on.
Jane Hanlon, Club Manager, The Premier Equity Release Club
2
LIFETIME MORTGAGE INSIGHT
Contents
4 The tide is turning 6 The future for retirement 7
Property question time
8 An incredible year for the Equity Release Council 9 How to identify vunerable clients 10 The evolving role of equity release 13 Take a closer look at the LV= team 14 Retirement Advantage’ new enhancements 16 Learning Zone 18 Product changes from 1st October 19 Contact details and extra services
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
The tide is turning By Jane Hanlon, Club Manager, The Premier Equity Release Club
Big mortgage lenders now want a slice of the £1.8 trillion tied up with over 55’s home ownership. Nationwide is the first high street lender (a mutual building society) that has put a deal together. Yes, it is a deal, open to new and existing Nationwide customers from the age of 55 through to 84. Distibution will be through Age Solutions, which is part of Age Partnership who will be the advice route to the product which is free with no product, valuation or advice fees. The borrowers will be required to take separate legal advice. The actual product is fixed rate 3.8% to 4.8% depending on the level of borrowing and has partial repayment options of up to 10% per year with fixed early repayment charges, decreasing in the first 15 years. There will be scope of additional borrowing according to the press release launched 17th November 2017. The product looks good, clear and defined in plain english and Nationwide is fully committed having joined the Equity Release Council. We could become NEGATIVE, but the very fact the high street has recognised the demand, and I am sure profitable for its members, is a bold statement to the market, to the consumer a “GREEN LIGHT” it’s ok to have a lifetime mortgage. No doubt more lenders will be turning to equity release to sort out the interest only term ends on loans with no repayment vehicle, so best be ready. TIME for you as an adviser to act, let your clients know you offer this service, whether you can advise yourself or act as an introducer. Unlike some of the high street that appeared in the first press release to be offering one product range with an almost one size fits most, you should be in a position to offer from whole of market giving access to schemes such as downsizing option, payment option with flexibility right through to the buy to lets and second homes. So, there is a very BRIGHT LIGHT at the end of the tunnel as we all grow older and people live longer. We are here the help and support you at The Premier Equity Release Club – giving
4
access to market leading commissions that better or equal to that of any other club, access to a knowledgeable and qualified support team that is second to none to help you with your cases. Simply call 01326 567970 or email helpdesk@thepremier equityreleaseclub.co.uk Free access to IRESS now with API HUB capacity, meaning a broker-to-lender interface to allow client details to be exported directly from mortgage broker systems into lender applications. First lender to be announced shortly.
Extra commission and deals
Workshops – Morning sessions in small groups so everyone can benefit Need a refresher? Starting out in lifetime mortgages? Come and join us, it’s FREE. Proven numbers of previous attendees have moved from new first timers to specialists in the space of a few months, due to the helping hand we offer at the club to point you in the right direction. The market needs you, your client needs you and we would like to help you be a specialist in this field, by sharing our knowledge. We pride ourselves on the fact it will not be boring and you will leave the session with more knowledge and be better prepared to earn an extremely good living. Get your self ready…..
Aviva
Individual pricing toolthere is an art to working the tool to get the best rate
Hodge
2.25% Fixed rate lifetime (extra 0.25% more and valuation deals)
Just Retirement
Free valuations and min commission £600
Legal & General
Flexible range 2.25% (extra 0.1% except of the Premier @ 2%)
LV=
Lump sum 1.75% (extra 0.75%) & Flexible 1.5% (extra 0.50%)
Married couple with house in single name – options
More2life
Qualify for marketing allowance, see below
Re-mortgaging lifetime- can it be done and the cost
One Family
2.3% commission (extra 0.2%)
Pure Retirement
2.3% commission (extra 0.55%)
Retirement Advantage
Qualify for marketing allowance, see below
And more. Book early, please email jane@thepremierequityreleaseclub.co.uk, stating location preference. Venues will be available early new year and communicated by email.
£50 Marketing allowance paid if panel Solicitor and panel lender used- MUST be instructed through the club - £50 paid once lender and solicitor confirm completion and can’t be used in conjunction with any other offer.
Maidstone
6th March
Brighton
7th March
Guildford
8th March
London City
Date to be advised
We will be joined by Jane from Ashford’s solicitors, with 1 or 2 lenders and will cover: Case studies including tenants in common
Draw downs and levels of reserves
Dial 01326 567970
for a deal……….. here we share our knowledge @ The Premier Equity Release Club
Retirement
Experts in Equity Release
Releasing future opportunities for your clients and your business • More for your customers with our Fee Contributions and Cashback options • Underwriters available as always for you to speak to directly on the phone • Dedicated Telephone Account Manager and Broker Support Team • Face to face BDMs to visit you in the field • Case Tracking facilities in our new online portal • Applications online, paper-based or even a hybrid of the two • Bespoke Marketing Support Team to help you build your business • New Learning Zone, edicational materials and updates on the market
0113 3660 599 www.pureretirement.co.uk
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
The future for retirement
Retirement
By Paul Carter, CEO, Pure Retirement
The future for retirement is a picture which has dramatically altered over the last few years. Gone is the safety net of the defined benefits system and the once-timely pension provided by the state at what most would consider a reasonable age for retirement. It’s now essential to look to other avenues of financial planning as a means of protecting the comfortable retirement which everyone works so hard for, and ideally well before the approach to pension-age. The issue for a lot of people is that warning of the pensions changes did not come early enough and the personal savings pots accumulated are insufficient to cover the shortfall. In fact, the percentage of disposable income which is used for savings in UK households, seems to be decreasing year on year rather than increasing as would be hoped. H1 this year saw a savings percentage of only 5.9%, compared to 7.5% the previous year and 9.3% the year before that. A large part of the problem seems to be that people do not anticipate living as long as statistics suggest. Investigation by Seniosphere, a European consulting firm in the ageing of population, emphasises the issue that many are not factoring this into their planning for retirement. While ONS figures suggest that 40% of men and 50% of women will live beyond the age of 90, only 5% of men and 7% of women over 50 surveyed, believed this would be the case for them. This lack of forward planning is an issue which is becoming ever more prevalent. Recent research from SunLife highlights real concerns amongst those over 50, with 85% believing they retired too early, 20% getting another job after retiring, and 20% admitting to earning extra money in other ways.
6
on later life lending and that a much more Indeed, the 3rd main concern of those surveyed was having enough money to live on. joined up approach is needed. More education on equity release is required for the wider field So, with the traditional routes of financing of advisers, who have a duty of care to their retirement fast becoming a thing of the past, customers in providing a solution which best it’s no wonder that the option of taking a suits their needs; a solution which may well be lifetime mortgage is increasingly appealing to a lifetime mortgage. the over 55s. It’s an option which can It may seem a daunting world to enter for alleviate the financial shortfall, with choices advisers new to the market, but the good allowing it to be tailored to individual customer needs, and with the peace of mind news is that there’s an ever growing network of support designed specifically for this purpose; of a no negative equity guarantee for all engaging with advisers and offering them step products approved by the Equity Release by step guidance to understand and advise Council. responsibly in the world of equity release. For it to be a real option for customers LMI magazine now includes a new Learning however, it needs to be presented to them Zone, developed with the support of Pure as an option wherever they go to seek financial advice. There is currently a real gap Retirement; a great place to start for educational resources and updates on the in the advice which customers receive, market, alongside tools and support services depending on where they go to receive it, something recently highlighted by Mortgage which can help you on your way to building your business in equity release and creating Solutions Better Business as an area of concern. It was recognised that product silos the more joined up advice network, so are not the answer when it comes to advice desperately needed for the retirees of the future.
Retirement
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Property question time The Equity Release Council is participating in a series of panel discussions on Property TV, answering questions from consumers about equity release and later life lending. These are currently being broadcast and can be viewed on Sky channel 198. Watch the accompanying advert here...
www.equityreleasecouncil.com
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
An incredible year for the Equity Release Council
appropriately agile, reflecting the changing marketplace.
2017 saw notable public affairs successes for The Council, including successfully lobbying for the inclusion of advice on housing wealth as part of Pensions Advice Allowance, and lengthy discussion of equity release during the House of Lords debate on the Finance Guidance and Claims Bill. The Council continues to actively engage with stakeholders, having this year met with Treasury and other government ministers, regulators, other industry bodies and voluntary sector organisations. Topics included the impact of the Solvency II regulation on the equity release sector and mental capacity. The Council also responded to 12 government and regulator consultations on behalf of its members, the most recent By Alex Ritchie, Communications Consultant, The Equity Release Council being the FCA’s proposal on retirement Committees. David also brings considerable interest-only mortgages. It has been a busy 12-months legal expertise to the role having been Promoting positive media messaging and in the equity release sector, Shadow Justice Minister from 2007-2010 increasing audience understanding of equity surpassing £800m lending in and a practising solicitor for 23 years. release are equally important elements of the Q3. As the industry continues He will assume the role of Chairman during Council’s work and they enjoyed more than to go from strength to strength, a period of sustained growth for the market, one mention in the media, every three days; the clear majority of which was positive. This The Council welcomes its new with trends suggesting the sector could had a potential circulation of 96.7m, almost chairman David Burrowes to surpass £3bn in annual lending for the first double that of 2016. During 2017 we time across 2017. spearhead its work to developed a White Paper; equity release represent the equity release Part of this growth is due to the transition, rebooted, hosted the Great Retirement Money sector and its customers. overseen by Nigel Waterson, to launch The Debate focusing on consumer capacity and Lawyer, former Conservative Equity Release Council in 2012 that presented at numerous industry seminars and coincided with the decision to expand the MP and Parliamentary Private conferences across the UK and Europe. remit of the trade body from representing Secretary, David, embarks on David Burrowes, Chairman of the providers back in the days of SHIP (Safe the role after serving as the Equity Release Council comments: Home Income Plans) to opening Conservative Member of membership to advisers, solicitors and other “As a society, we face significant challenges in Parliament for Enfield industry professionals. The move has addressing the impact of an ageing Southgate from 2005-2017. increased the membership and bandwith of population, rising social care needs and The Council, which now stands at 671 inadequate pension funds. While there is no A strong campaigner for individuals and 219 member firms, up from one-size-fits-all solution, I firmly believe that local and national 20 firms that made up the membership in equity release can play a major role in helping causes, David has summer 2012. older people meet those challenges and championed consumer improve their financial outlook in later life. This year The Council has seen networks protection on issues becoming members, along with two “I am excited by the opportunity to work on including legal and sourcing platforms and another high street behalf of the sector and will put the best medical services, and lender Nationwide, who has entered the interests of the consumer at the core of our led campaigns for lifetime mortgage market. future work. I hope to use my experience improved social and end-of-life care. He also worked on behalf of his constituents on The Council has also built effective working gained in Parliament to further this cause and to build the profile of equity release with a issues relating to pensions and financial relationships with government and diverse range of stakeholders across industry, services products, working closely with regulators, as well as other areas of the government and regulators. Ministers, regulators, banks and the Treasury financial services industry, as housing Select Committee Chair to protect consumer wealth is increasingly viewed on a holistic “I also commend Nigel Waterson for his interests via active membership of a number level within later life planning, while service to The Council over the past six years. of All Party Parliamentary Groups. maintaining its strong focus on consumer The equity release market has been protection. strengthened during this period, buoyed by a During his time in Parliament, David served growing membership and increased as Parliamentary Private Secretary to three David’s arrival coincides with the Cabinet Ministers, across the Cabinet Office development of The Council’s new strategy competition. I look forward to working with the and the Department for Environment, Food and manifesto for the years ahead, ensuring board and engaging with those within industry and Rural Affairs, and sat on the influential that it remains consumer focussed and that as we build on the significant progress to date.” Home Affairs and Public Accounts Select the Standards remain relevant and
with a new chairman joining to drive future plans
8
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
How to identifty vulnerable clients
By Jonathan McCaffrey, Specialist Key Account Manager, Just Retirement
Is a client vulnerable? At first glance this appears to be a fairly straightforward question to answer. And advisers should already have an existing approach in place for helping individuals they assess as vulnerable. But is it always so easy to spot a vulnerable person? Defining vulnerability A common misconception is that a vulnerable client is simply someone experiencing the frailties that often occur with advanced ageing. The FCA has built on their initial definition of what they think vulnerable consumers are; ‘people who can readily be identified as significantly less able to engage with the market and/or people who would suffer disproportionately if things go wrong’. This definition suggests vulnerability can affect anyone, and can impact numerous clients seeking (or in receipt of) financial advice. In many cases, there’s an element of subjectivity for whoever is attempting to make an assessment.
It therefore makes sense and demonstrates best practice to have an awareness and understanding of the issues surrounding vulnerability. Indeed failure to correctly manage a vulnerable client can result in reputational damage and complaints. Most importantly, this can also have a huge impact on the customer.
Vulnerability and equity release Identifying vulnerable clients is particularly important when considering equity release for the following reasons: 1. According to the Equity Release Council, the average age of people taking drawdown equity release is 71. And the fastest growing age group unlocking the wealth in their homes are those between 75 and 84. The older people get the more likely they are to suffer a degree of vulnerability. 2. The decision to take out equity release is a substantial one. For most people their home is their biggest asset and deciding to borrow against this shouldn’t be taken lightly. There’s also inheritance expectations to consider. Do they have the support from their children and other family members?
• severe or long-term illness (for example, cancer); • mental health problems; • low income and/or debt; and • change in circumstances (e.g. bereavement, divorce, job loss). It’s easier to spot potential vulnerability in some people than it is with others; for example, someone with a physical or sensory disability. Other risk factors might be hidden and can only be identified following more in-depth client interaction. It’s important that advisers feel confident about being able to openly and effectively discuss risk factors with a client. Doing this will help make sure a client’s needs can be met.
Some helpful next steps There are lots of steps that can be taken to ensure good practice. Below are some suggestions: • Consider setting out a written approach to vulnerability. • Review existing policies and documentation to ensure they reflect that policy.
• Seek feedback from clients on how to 3. Equity release is a complex product and improve the services offered. it’s important that clients understand how • Consider the role of third parties (for it works. The impact of compound interest There is no expectation that advisers must example, relatives, carers, attorneys/deputies) can mean that the debt accelerates act as medical professionals when dealing and their ability to provide instructions. quickly. Clients need to be able to with clients. However an awareness of some appreciate this and this can be difficult if • Consider the merits of undertaking of the indicators that may cause someone to the client is vulnerable for any reason. additional training to enhance be treated as vulnerable is required. understanding. This will also have the Identification of vulnerability Why an awareness of potential benefit of contributing towards Continuous vulnerability matters Many organisations (including the FCA and Professional Development (CPD). Citizens Advice) suggest vulnerability is Potential vulnerability is more widespread • Seek to build connections with other identified by understanding risk factors. than many imagine: professionals, if additional support is Below are some risk factors which could • Only one in seven adults has the literacy required. point to vulnerability. skills expected of a child aged 11 or below. • Just under half of UK adults have a numeracy attainment age of 11 or below. • Almost half of adults don’t have enough savings to cover an unexpected bill of £300. • Dementia affects one in six people over 80.
Risk indicators (not an all-inclusive list)
Conclusion
We’ve only highlighted some of the many ways vulnerability can present itself. It’s a • low literacy, numeracy and financial complex and wide-ranging topic that should capability skills; be incorporated as part of the advice process • heavy reliance on others for support/care; to ensure an effective review of a client’s needs. It’s also essential to keep vulnerability • communication difficulties (for example, in mind when advising on certain products English not being a first language or limited such as equity release. speech); A few examples include:
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
The evolving role of equity release By Rob Miles, Head of IFA Sales, Legal & General
Transforming retirement lending with multi award-winning lifetime mortgage solutions
No longer niche Equity release is a hot topic. No longer a ‘last resort’ option considered only by a small number of niche advisers – it now represents almost a third of later life borrowing. A record £2.15 billion was unlocked in 2016. Measured by the value of lending, the market has almost trebled in size in the last five years.1 An adviser recently confided in me that his peer had once ‘turned their nose up’ at mention of equity release. It had taken some persuasion that her wealthy clients could ever be in the market for such a product. As a convert himself (one of many driving an explosion of growth in the market) he is surprised at the lack of awareness of how far these products have come since their once “grubby” old image. Increased regulation by the Equity Release Council means that products are more customer-friendly than ever before and offer increased protection for homeowners. However, some myths remain. In 2015 the Financial Conduct Authority (FCA) suggested that equity release - once “a dirty word” - still had problems with its public image.2 There is clearly still some ‘myth-busting’ to be done.
10
The facts are that: With a lifetime mortgage (equity release), your client could release some of the equity that’s tied up in their home – tax free. It creates a debt against their home. The loan is repaid when the last property owner dies or moves out of their home into long-term care. The client retains ownership of their own property. Interest is added to the amount owed each month, so interest is charged on the loan plus any interest already added. This means the amount owed grows quickly, reducing the equity in the property and the value of any inheritance.’ Inheritance protection and negative equity protection offer further security for homeowners and their beneficiaries. The advantage compared with a residential mortgage or traditional loan is that there are no monthly payments. There may be cheaper ways to borrow.
It’s not right for everyone but for some it can offer an ideal solution to their retirement cash needs. Oh, and wealthy people do it too. For some, it makes good financial sense. This adviser is just one of the ‘new’ enthusiastic converts to the market. “In my role I see advisers from all walks of life – residential mortgages, wealth and general retirement planning. There is lots of interest in equity release. It’s part of my role at Legal & General to bridge that knowledge gap and support advisers ‘getting started’ whatever their background. ”
1 Equity Release Council Market Report Spring 2017 2 Financial Reporter April 2015, noted that at an FCA Mortgage Conference, Christopher Woolard, Director of Strategy and Competition, admitted that “in the not too distant past, equity release became a dirty word”.
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Equity release can offer a further choice and more opportunities In July we spoke to 344 Advisers about equity release (lifetime mortgages). How are these Advisers using lifetime mortgages to help their clients? 63% to help their client pay for home improvements 57% to fill an income shortfall 55% to help their family members financially 53% to repay an interest-only residential mortgage 41% to repay other debt 17% for holidays 3
Shelter: Food for thought: applying house price inflation to grocery prices’ February 2013. Sliced white loaf would cost £4.36.
Expert advice House price growth creates other considerations too. For many young people, the possibility of owning their own home is fading. Wages are not rising in line with house price inflation. Sky-high rents mean that saving a deposit is difficult. More than half of the Advisers that we spoke to had facilitated homeowners giving money to family members. This will have included grandparents gifting money to their grandchildren to enable them to buy their own home. For many, this is not only an act of altruism – it is a sensible tax planning strategy. As it stands today, money gifted to family seven years or more before death could avoid hefty inheritance tax.4 The hard-nosed and softies alike benefit. The hard-nosed financiers among us benefit from a tax efficient inheritance strategy. The softies get to see the grandchildren settle down into their new pad. It’s a win, win situation. Long term care, later life divorce and managing monthly debts are also ways in which the product is being used to help people in retirement. The Equity Release Council is predicting strong growth in 2018.5 It’s an exciting time for advisers in the equity release business. Continued growth will depend on a number of factors – house price growth, consumer
So what is driving this growth? If an Englishman’s home is his castle, then increasingly, it’s also his piggy bank. House prices have increased at a rate 42 times that of inflation since the 1970s. To put that in context, if a loaf of sliced white had risen at the same rate you’d be paying almost a fiver for your daily bread!3 Low interest rates mean that money in the bank isn’t rising in value nearly as fast. If you bought your home 30 years ago, it’s entirely possible you’d have more equity in your home than in your savings account or even pension combined! But, unlike cash, bricks and mortar cannot be so easily spent. Some people upon retirement will opt to downsize or move to a cheaper area. For those comfortable and happy in their lifelong homes surrounded by familiar faces – this will be a less palatable option. Equity release offers a further choice. A choice to stay put. To stay living in your home… or even, a better home. 63% of Advisers have helped a client use equity release to fund home improvements. That could mean adaptations to ensure a mobile old age or it could be a fancy new kitchen. It could mean a new conservatory or loft conversion. For some, it could mean the difference between staying in their own place or moving to a specialist care home. For others – it’s an opportunity to splash out and ‘make the most’ of their existing property.
confidence in the products and sustainable interest rates for continued affordability of loans. One additional factor is of course; who will advise on equity release? To expand the market we need to expand the base of advisers qualified and able to advise on these products.
Are non-specialist advisers ready for this opportunity? In July we questioned 344 Financial Advisers - experts in residential mortgages, pension planning and investments - about what they thought about lifetime mortgages. We found that a whopping 69% of respondents are already advising or referring clients for lifetime mortgages as part of their day to day business. It was clear that many felt unprepared. Some felt daunted by the qualifications and specific knowledge required to advise their clients. Others were unsure how to identify the best clients for equity release or how it could be helpful. There is clearly a learning curve for both consumers and advisers to benefit fully from the opportunities of equity release. However, the financial incentives as the market grows will no doubt encourage more advisers to get to grips with the topic. 4
Inheritance Tax, Gov.uk. https://www.gov.uk/inheritance-tax/gifts
Introducing Rob Miles Rob Miles joined us in July as Head of IFA Sales in Legal & General’s lifetime mortgage business. Prior to joining Legal & General Home Finance, Miles was Head of Legal & General Individual Wealth Sales. Rob is spearheading Legal & General’s strategic aim of making lifetime mortgages a mainstream solution for retirees with accumulated property wealth. Want to find out more about how we can support you growing your lifetime mortgage business? Rob is meeting company directors and advisers from all over the UK to hear your challenges and build greater support for those looking to join the lifetime mortgage community.
Call or email Rob on: rob.miles@landg.com 07979 534637 call charges will vary. 5
Equity Release Council Market Report Spring 2017
Legal & General Home Finance Limited is a wholly owned subsidiary of Legal & General Group plc. Registered in England and Wales number 04896447. Registered office: One Coleman Street, London EC2R 5AA. Legal & General Home Finance Limited is authorised and regulated by the Financial Conduct Authority.
By Beth Jones, Marketing & Communications Executive, Hodge
Do you deal with clients age 55 and over? Do they need a mortgage, but think they are too old or simply don't like the idea of equity release? If the answer is yes, take a look at our 55+ interest only residential mortgage, it's not equity release, its a repayment mortgage available for customers age 55-95. Think choice, think mortgage solutions for your over 55 customers, think Hodge. Recent FCA data states the total amount of mortgage debt held by over-65s is projected to almost double from £20.1bn to £39.9bn by 2030 because of people buying later in life.
people will choose to work well into what might have been previously considered ‘standard’ retirement age and that they may have several different income streams that change as time goes on.
It follows the publication of a paper on the ageing population identifying issues in the mortgage sector that could lead to poor consumer outcomes. We are a nation of people living longer, rather than being seen as a problem to be resolved, we at Hodge believe older customers should be treated as a segment of the market to be served and served well.
Our expertise has enabled us to create a range of options and as a responsible lender, we strive to understand the requirements of today's over 55 consumers. We offer a range of equity release products but we appreciate these are not for everyone and so we also offer an alternative in our 55+ mortgage.
We don’t stereotype your customers or view all older borrowers as ‘typical’ or as simply retirees. At Hodge we understand many
We provide you with a selection of products to suit a wide and varied range of customer. Our 55+ residential mortgage offers interest only lending to your customers aged 55-95.
55+ Mortgage proc fee up to 0.55% loans from £20,000 to £500,000 max property value £1,000,000
The 55+ Mortgage Residential Mortgage - term from 5 to 40 years - choice of rates and ERC's Available in England, Wales and Scotland the 55+ Mortgage is an interest only residential mortgage for customers aged 55-95. With a choice of available rates from 3.35% and ERC's of either 2 or 5 years. The LTV available is 60% based on affordability and we look at income both pre and post retirement including employed/self-employed, pension, investment and rental. You do not require an equity release qualification to recommend the 55+ mortgage. We continue to innovate within the over 55 lending sector and do our very best to provide suitable options for today's borrowers, we recognise that there is no longer a 'typical' customer or scenario and continue to look for ways serve the later life market.
Click here For a 55+ at a glance document Alternatively call 0800 731 4076 to speak to one of our dedicated broker support team
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Take a closer look at the LV= team By Georgina Oxton, Equity Release Strategic Sales Manager, LV=
As a new year is upon us I thought it would be useful to introduce you to our desk-based equity release sales team here at LV=. Our small team of equity release specialists are based at our Retirement Solutions Head Office in Hitchin, Hertfordshire. They are tasked with providing TPERC members with best-in-class sales support. They can assist with product information, details of our lending criteria and can also produce equity release quotations for you. They are also happy to discuss individual cases with you to see if we can find a solution for you and your clients. Esther Hobden has been with our Equity Release Business for almost 5 years, having moved to LV= from a visual merchandising and sales role outside the financial services industry. She spent her first two years at LV= working on our Equity Release New Business team so understands very well the needs of your customers and also the processes involved. Esther loves being able to make a difference to a customer’s quality of life by assisting you as equity release advisers. She has recently passed ER1 and has plans to complete other relevant exams in the near future to ensure the knowledge she passes to you is as good as it can be.
Connor McMurray has been with LV= for over 6 years, working predominantly on our Equity Release New Business Team so knows our end-to-end process better than anyone. He moved to Sales in August 2017 and hasn’t looked back since. His desire to achieve right customer outcomes has already ensured he has become the ‘first point of call’ for his supporting advisers. When he is not spending time preparing for his next boxing match, he is often found researching the equity release market to ensure his knowledge remains up-to-date. Chris Coe is the newest member of our team having joined LV= in October 2017. We have been fortunate to acquire Chris from a Mortgage and Protection advice firm in Suffolk, where he spent 3 and a half years advising clients. Having been an adviser, Chris can empathise with you and provide support that only someone with his experience can. His knowledge of the difference between Equity Release lending criteria and the standard mortgage market criteria has already proven to be beneficial to many advisers and saved them valuable time during the research phase… Lewis McLean is our new BDM having been promoted in October 2017. Lewis has been with LV= for 11 years and has recently
moved to the team after a successful stint as a Retirement Consultant. Some of you may remember Lewis from his time as a telephone consultant on the Equity Release team a few years ago. Lewis is very open about his desire to become a real benefit to any adviser that needs his support and expertise. He is happy to give his time to any adviser to ensure you and your clients achieve the right outcomes every time. George manages our equity release sales desk and has been with LV= for more than 15 years, spending the last 10 years within the equity release business. She also has experience of working in one of the leading equity release specialist advice firms in the UK, together with extensive experience in the area of high value/complex lending.
If you have any cases you’d like to discuss or you’d like to have a chat around the levels of support we can offer to you and your business, including how we can help with Marketing, please don’t hesitate to contact us on
0800 0288 974
(option 2) or Equityrelease.sales@lv.com. 20465-2017
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Retirement Advantage’s new product enhancements By Alice Watson, Head of Marketing, Equity Release, Retirement Advantage
At Retirement Advantage we believe that it’s important to understand how our customers think, because it will help us to deliver better outcomes for them.
• In the case of joint borrowers, if your client decides to repay their Lifetime Mortgage within 3 years of the date that the first borrower dies or goes into long term care. These waivers can help to assure your customers that, even if their circumstances change unexpectedly, they still have control over their finances.
For us, product innovation is central to developing products that meet clients’ needs in this respect. We believe that the more the equity release industry innovates as a market, the better the outcomes will be for our clients. If we can continue to develop and improve product offerings, we can improve certainty and flexibility for customers.
Our research has found that the two most important factors that over 50s consider when they think about their retirement income options are certainty and flexibility. 45% of over 50s believe that certainty is the most important factor, and 36% consider flexibility as the number one factor when they make decisions about their retirement income. We’ve taken this into account, and have introduced a number of product enhancements, available for main residences only, taking effect from Wednesday 6th December.
15% Voluntary Repayment Option To provide greater flexibility to your clients, we’ve increased our annual voluntary repayment allowance on our Voluntary Select Options from 12.5% to 15%. Customers can make an unlimited number of payments throughout the year, with a minimum payment amount of £50. Customers can make these payments by standing order, BACs transfer, cheque, or by debit card over the phone, making the process even easier.
Early Repayment Waivers In addition, our early repayment waivers are now permanent features on our Interest Select and Voluntary Select Option product ranges. These features provide your customers with a greater sense of certainty, providing reassurance that they will not need to pay an Early Repayment Charge in the following circumstances: • If, after 5 years, they decide to redeem the mortgage because they want to move to a different property, they will receive our Downsizing Protection and won’t be charged a fee.
14
Retirement Advantage, Expanding Horizons, 2017.
1
To find out more about our enhanced product ranges, please visit www.retirementadvantage.com
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Spotlight on Lasting Power of Attorney for therightwill health & welfare & estate planning
Vital later life planning for you and your clients By Adam Stretton, Director, The Right Will & Estate Planning
A person’s capacity to manage their affairs can be lost for many reasons, such as a sudden accident or a medical condition. With over 850,000 people in the UK currently living with dementia; ensuring your clients’ loved ones have the ability to make decisions on their behalf is essential. Many people understand the advantages of making a Lasting Power of Attorney (LPA) for Property and Financial Affairs, often viewing this type of LPA as more important than a Health and Welfare LPA. However, a Health and Welfare LPA is equally, if not more important, for the reasons explored in this article.
850,000 2017 1 million 2025 2 million 2051
1 EVERY 3 minutes someone will develop dementia
people with dementia in the UK
1 IN 6
70%
over the age of 80 have dementia
This is not an isolated case, we have been made aware of several instances where clients have been in the same terrible position, which could have been easily avoided with a Health and Welfare LPA in place.
people in care homes have dementia or severe memory problems
client’s family when compared with establishing a Health and Welfare LPA.
Act before it’s too late
A Lasting Power of Attorney can only be made whilst your client has mental capacity. How happy would your clients be to allow If they lose mental capacity before making an Social Services to make all the decisions LPA then your client’s family will have to apply about where they should live? to the court of protection in order to become their deputy. Drafting a Lasting Power of Can any decisions made be What would concern you most if Attorney for your clients provides them with challenged? you were unable to make decisions In the absence of a Health and Welfare LPA or the reassurance of knowing that they have for yourself? someone they trust to make decisions for a Deputyship order, the Mental Capacity Act Would it be - Where you lived? What you them, should they lose capacity in the future. allows decision makers to take action in ate? What care and medical treatment you providing care for individuals who lack Refer and earn £400* were given? capacity. The difficulty with this is that We have partnered with The Premier Equity ‘decision makers’ often have competing Or would it be – Is my money being spent Release Club to offer a refferal scheme for objectives such as balancing out what is in wisely? Wills and LPAs for all club members. To find the best interests of the patient verses the out more visit The following is a true account of what cost considerations of providing that care. www.rightwilladviser.co.uk/tperc-refer-and-earn happened recently to one of our clients who If your client’s family want to dispute a had no Health and Welfare LPA in place. Find out more decision made by professionals / authorities, ‘Mrs A’ was admitted to hospital and, then they would need to apply to the Court of To find out more about creating your own following a lengthy stay, Social Services Protection for a Deputyship order. Not only is LPA for health and welfare, or drafting one for along with the Local Authorities compiled a your clients, please don’t hesitate to get in this an expensive and lengthy process, but health report with an assessment for care. the Court is also unlikely to appoint a Deputy touch with us. Naturally, her children wanted to be involved for health and welfare decisions. The Right Will Team in this process so they could ensure that the care package would be what ‘Mrs A’ would Health and Welfare Deputyship Orders are T: 01564 732 740 have wanted. Not only were they not invited granted more sparingly than Financial Deputyship Orders and many are rejected by E: admin@therightwill.co.uk to any of these meetings, the authorities the Court. The Court will only appoint a Health also refused to reveal the contents of the *£400 is based on a couple having a Mirror and Welfare Deputy as a last resort, and health report to ‘Mrs A’s’ own children. All Will and Lasting Power of Attorney each taking this route is much more expensive, decisions were made without any of her time consuming and stressful for your immediate family being present.
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Learning Zone Inspired by Pure Retirement’s new Learning Zone on their Online Portal, we’ll be including a new learning zone section in our 2018 magazines, highlighting the events and resources that are readily available to you, keeping you updated on this ever-growing market and helping you to build your business in equity release.
Adviser Guide to Equity Release From Pure Retirement and The Equity Release Council, a step by step guide to the equity release market and the end to end advice process..
Click here to find out more...
16
Available Resources
Lifetime Mortgages Equity Release Webinars
Latest series with expert speakers from the market
Click here to find out more...
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Upcoming Events
Q1 Events Personal Touch Live January 18th
Mortgage Strategy Awards February 28th
Recent Headlines
In The News
Half of savers don’t know their pension provider
Watershed year for equity release
Financial Services Expo March 13th
Third of mortgages cleared by equity release
Building
Business Your in Later Life Lending
Marketing Support
Pure Service Toolkit
Pure’s Marketing Team are on hand to help you reach your customers, with a whole range of bespoke materials for you to use with your existing clients, prospect clients and potential introducers Click here to find out more...
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Rate changes from 1st October 2017
Lender
Product
Lowest Rate
Aviva
Flexi Lump
Please note that each Aviva case is individually assessed.
Hodge
Highest Rate
Retirement Flexi Life Lump Lifetime Plus Lifetime Max Lifetime ULTRA Sept CPI applied Indexed >55 on 1st April Indexed Plus every year Indexed Max
3.79% 4.79% 4.59% 5.09% 5.59% 5.89% 3.00% 3.40% 4.54%
4.40% 4.29% 4.09% 5.09% 5.59% 5.89% 4.00% 4.50% 4.54%
4.40% 4.29% 4.09% 5.09% 5.59% 5.89% 3.53% 4.03% 4.54%
Just Retirement
Roll Up Lump Sum Lite Lump Sum Lump Sum C/Back £1000
5.29% 60- from 4.85% 5.62% 5.72%
5.29% 5.29% 5.62% 5.75%
5.29% from 4.85% 5.62% 5.72%
Legal & General
Flexi Flexi C/B Flexi Plus Flexi Plus CB 2% Flexi Max Flexi Max CB 2% Flexi Max Plus Flexi Max Plus CB 2% Premier Range
3.89% 4.09% 4.25% 4.45% 5.20% 5.40% 5.69% 5.89% 3.74%
3.97% 4.17% 4.31% 4.51% 5.26% 5.50% 5.74% 5.94% 3.83%
3.94% 4.14% 4.27% 4.47% 5.16% 5.36% 5.74% 5.94% 3.83%
LV=
Flex Lump Sum
6.04% 3.80%
6.04% 3.9%-5.03%
6.04% 3.90%-5.03%
More2life
Tailored Enhanced Tailored Choice Cashback 3% Capital Choice Capital Choice Cashback 3% Capital Choice Plus Capital Choice Cashback 3%>35K
6.33% 6.72% 4.79% 5.27% 5.11% 5.48%
6.37% 6.72% 4.94% 5.28% 5.22% 5.58%
6.33% 6.72% 4.82% 5.27% 5.11% 5.48%
Onefamily
Lump Lite CPI Lump Lite Fixed Lump Standard CPI Lump Standard Fixed Voluntary Lite CPI Voluntary Lite Fixed Voluntary Standard CPI Voluntary Standard Fixed Interest Lite CPI Interest Lite Fixed Interest Standard CPI Interest Standard Fixed 2 Year Fixed Linked to CPI
3.56% 5.00% 3.76% 5.50% 4.06% 5.50% 4.27% 6.00% 3.56% 5.00% 3.76% 5.50% 3.97%-4.80%
5.64% 5.30% 5.85% 5.80% 6.16% 5.80% 6.37% 6.30% 5.64% 5.30% 5.85% 5.80% 3.97%-4.80%
5.64% 5.00% 5.85% 5.80% 6.16% 5.50% 6.37% 6.30% 5.64% 5.00% 5.85% 5.80% 3.97%-4.80%
London & SE rates go up slightly
Fixed until 30/11/2020
Pure Retirement
Drawdown 1 Drawdown 2 Drawdown 3 Cashpack option 2.5%
6.29%-6.84% 6.04%-6.59% 6.44%-6.99%
6.39%-6.99% 6.14%-6.74% 6.54%-7.14%
6.29%-6.84% 6.04%-6.59% 6.44%-6.99%
Retirement Advantage
Interest Gold Interest Platinum Voluntary Gold Voluntary Platinum Lifestyle Lite Lifestyle Gold Lifestyle Gold Plus Lifestyle Platinum Lifestyle Platinum C/Back 3% Lifestyle Voluntary
5.49% 5.99% 5.69% 5.89% 3.99% 4.38% 5.59% 6.58% 6.88% 6.44% 6.64%
5.49% 5.99% 5.69% 6.29% 3.99% 4.38% 5.59% 6.58% 6.88% 6.44% 6.64%
5.49% 5.99% 5.69% 6.29% 3.99% 4.38% 5.59% 6.58% 6.88% 6.44% 6.64%
New New BTL & Seconds
Please always check lenders rates and commissions as this can change without notice.
18
Current Rate
LIFETIME MORTGAGE INSIGHT Issue no.5 January 2018
Contact details and extra services Lenders
Solicitors
Sourcing
Aviva www.aviva-for-advisers.co.uk 0800 015 4909
Ashfords 01392 334060 £495 + VAT + disbursements for club members.
Iress- free www.thepremierequityreleaseclub.co.uk Registration on home page left scroll down.
Bridgewater 08451 4050600
Ashfords London Premier Service £750 + VAT + disbursements for quicker turnaround by 5-10 working days.
Crown 0208 875 5665 Mark King
BBH 0800 051 4218 www.bbhlegal.co.uk £695 incl VAT for club members.
Benefit software.
Hodge Lifetime www.hodgelifetime.co.uk 0800 731 4076
Gilroy Steel 01604 620890 www.gilroysteel.co.uk £495 + VAT for club members.
Freeben www.freeben.co.uk 30 day free trail and £40.50 per annum with 10% discount per annum for club members.
Just Retirement www.justadviser.com 0113 3660 599
Marketing deals available if using panel solicitors and lenders £50
Legal & General www.legalandgeneral.com centre 03330 048 444
NEW LPA /WILL Service
LV= www.lv.com/adviser 0800 028 8974
The Right Will Please see article
Website for IFA made to measure from £145 for 12 months. From Freeben, call Jane 01326 567970
More2life www.more2life.co.uk 08454 150 151 Onefamily www.onefamilyadviser.com 0800 802 1645
PI COVER
Pure Retirement www.pureretirement.co.uk 0113 3660 599
The PI Desk Market leading with 18 years experience in FS. Call Jane 01326 567970
Retirement Advantage www.retirementadvantage.com 0800 068 0212
WEB Services
Equity Release Council www.equityreleasecouncil.com 0844 669 7085
Retirement
Please note any information in this magazine is for registered intermediaries and NOT to be issued to members of the public.