Recent findings reveal a significant demographic shift in equity release customers, who are becoming progressively younger.
- Under-70s now constitute 59% of all new initial equity release activities, marking an increase from last year’s 43%.
- The average age of new lifetime mortgage customers has decreased to 68, reflecting a youthful trend in this financial solution.
- Drawdown plans have overtaken lump sum plans in popularity among new customers for the first time in Q3 2024.
- The growing segment of younger and single female applicants highlights a shift in the equity release landscape.
The latest research from Pure Retirement indicates a notable demographic shift in the equity release market, with under-70s now making up 59% of new initial equity release activities. This represents a significant rise from 43% at the same time in 2023, suggesting a clear trend towards younger customers opting for equity release solutions.
A detailed analysis conducted by Pure Retirement across the third quarter of this year shows that the average age of new lifetime mortgage customers has lowered to 68. This trend underscores a shift towards a younger demographic leveraging this financial option, perhaps driven by evolving financial needs and retirement planning strategies amongst younger cohorts.
Furthermore, drawdown plans have become the preferred choice for new equity release customers, surpassing lump sum options for the first time. In the last quarter, 51% of new customers opted for drawdown plans, compared to 41% a year earlier and 46% in the second quarter of this year. This shift may highlight changing financial strategies among customers who prefer flexibility in accessing their equity.
The data also reveal an increase in the proportion of single female applicants, which rose to 70% among single life applicants. This marks a rise from 64% at the same point last year and 67% in the second quarter of this year, indicating a growing segment of women choosing equity release.
Loan usage patterns have remained stable overall, with predictable needs-based utilisation among lump sum users, who are twice as likely to allocate funds for essential needs compared to drawdown customers. Meanwhile, 15% of drawdown users consistently channel their funds towards travel, showcasing distinct preferences based on the chosen financial plan.
The shift towards a younger demographic in the equity release market continues to present new opportunities and trends for the industry.
