Life expectancy and equity release interest on the rise

Rising life expectancy in the UK is likely to prove of interest to equity release providers, who are already optimistic that 2009 will be a year of strong growth for the sector.

According to the Office for National Statistics, life expectancy for a UK male has increased by 26% in the past 20 years. For females, the rise stands at 14%.

Therefore, a man aged 60 in 2006 can now expected a further 21.1 years of life, while for the average woman, the years ahead number 24.1.

For this couple the average length of time spent in retirement is 16 years for the man and 24 years for the woman.

However, funding such lengthy periods post employment can be difficult and the UK’s equity release specialists are expecting the market to boom in the years ahead.

With the added pressure of the credit crisis and falling interest rates wiping out returns on savings and investments, three quarters of Independent Financial Advisers say they are anticipating a surge over the next three months.

According to the latest IFA Confidence Index from Hodge Lifetime, 60% of IFAs expect the number of completed equity release schemes to rise by at least 5%.

Meanwhile, 57% of respondents reported a rise in interest in equity release during the final quarter of 2008.

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