Perhaps the secret is not to use the words.

• “Equity release” – Is releasing funds, but a saying not liked

by the public.

• “Lifetime mortgages” – Are still here a little more accept-

able, but many clients dislike it as lifetime meaning it is long

and for the old.

At 55 with a life expectancy of 35-40 years, are the phras-

es ‘equity release’ and ‘lifetime’ difficult to swallow? They

just want a mortgage. But to get around the system they

fall into this category, rejected by the high street on the

grounds that they are:

• Too old

• Self-employed

• Income and expenditure issues

• Failed credit score

• Benefit claimants

These are just a few with many more excuses, but these are

perfect for equity release or lifetime, but call it a MORT-

GAGE with long term fixed rates.

New innovative lending has arrived, mortgages

with options under the Equity Release Council guarantees,

with rates starting as low as 4.94% monthly and with in-

creases in LTVs of up to 5% cannot be ignored. A 3rd lend-

er has introduced fixed rate ERCs so fully transparent.

It’s never been a better time to target your mortgage data-

base. You should be contacting your clients to offer what

could be the cheapest and highest LTVs available in their

lifetime. Remember the MORTGAGE can be used for pur-

chase as well as remortgaging, it may even be up-sizing

rather than down-sizing?

Product knowledge? Need to know more? Then why not

join us at one of our FREE breakfast workshops.

More info on next page.

Join us to improve your knowledge & your ability to identi-

fy opportunities, the new product ranges coming to market

that allow choice like we have never seen before, including

mortgages that do not have to be based on income!

RESULT!

Jane Hanlon, 0800 612 5423

LIFETIME MORTGAGEINSIGHT

Issue n. 3 | June 2015

B r o u g h t t o y o u b y T h e P r e m i e r E q u i t y R e l e a s e C l u b0 8 0 0 6 1 2 5 4 2 3

Is property the new pension?By Dave Morris, more2life

Page.3

Why property wealth should be considered by those wanting to clear an interest only mortgage

By Alice Watson, Retirement Advantage

Page. 4

Number of borrowers using equity release to clear interest only loans trebles*By Jane Hanlon, The Premier Equity Release Club

Last year News reported that clients would become mortgage prisoners, but in 12 months the providers have adapted… Have you?

7 year gilt rate at 08/06/15 = 2.44% *reported by Mortgage Strategy 1st June 2015

2 Lifetime Mortgage Insight - Issue 3 - June 2015

Breakfast workshops: “Get to know your lenders” - will create you more opportunities!Hosted by Jane Hanlon, The Premier Equity Release Club and Bob Boon, Ashfords LLP

Six months ago we didn’t have a non status mortgage!

Find out more join: Jane Hanlon from The Premier Equity

Release Club and Bob Boon (formerly Stonehaven) now at

Ashfords Solicitors, for a breakfast workshop on product

innovations, marketing and opportunities in this exciting

growing market, for mortgages for the over 55’.

Jane & Bob have announced the first two workshops start-

ing from 9.30am and finishing within two hours, including

issue of CPD certificates.

London - 7th July - Ashfords LLP, 1 New Fetter

Lane, EC4A 1AN

Exeter - 14th July - Ashfords LLP, Ashford House,

Grenadier Road, EX1 3LH (Easy access just off M5 junc-

tion 29 )

More dates and venues to follow after the summer break,

watch this space for more details.

The workshops, will cover:

• Meet the innovative and invited lenders

• Jane will cover all remaining lenders’ unique selling points

• Bob will cover marketing and identifying new opportuni-

ties

• A question and answer session to finish

• Support material to take away and CPD sent by email

after event.

After the event there will be the option to discuss any com-

pliance support requirements.

Jane & Bob would be delighted if you would like to join

them. Spaces are limited so booking essential.

Click here for more info & to book your place.

Book your place:

www.thepremierequityreleaseclub.co.uk/breakfast-workshops

3Brought to you by The Premier Equity Release Club. Contact our free helpdesk on 0800 612 5423.

Is property the new pension?By Dave Harris, Managing Director, more 2 life

The question over whether it’s better to invest in a pension or a property has long been a matter of much debate, and continues to plague the younger generation. But now it looks like the argument could take on a whole new dimension - this time becoming a tax and inheritance issue for our baby boomer generation.

When the Chancellor announced that

the 55% ‘death tax’ was going to be re-

moved from pensions, it was a change

that was welcomed by both advisers

and clients alike. Until then, the fact

that their pension fund would be

taxed at 55% when they die, or worse,

be lost altogether if they had bought

an annuity, was just another reason

why people were starting to turn to-

wards other ways of financing their

retirement.

The recent changes mean that if a

person dies before they are age 75,

the pension fund can be handed down

to their beneficiary tax free. The ben-

eficiary will then be able to draw an

income or take it all as one lump sum,

without paying any tax. If a person

dies after they are age 75, the benefi-

ciary will pay 45% tax (2015/16) on a

lump sum, or they will pay tax at their

marginal rate if they choose to take an

income from the fund.

Although the primary function of a

pension is to provide an income in re-

tirement, one of the repercussions of

this change is that people could end

up ring-fencing their pension for as

long as possible, or at least until they

are age 75. That way, if they die, the

entire fund will remain untouched by

the tax man.

That’s all very well, but what if they

need the money? Well, one source

of income could be their property.

With lifetime mortgage interest rates

reaching an all-time low, and continu-

ing to slide, the idea of releasing eq-

uity from their home could become

a serious contender for financing re-

tirement. After all, any cash they take

from their property is tax free, as op-

posed to the income taken from a pen-

sion which, apart from the first 25%, is

taxed at their marginal rate.

Taking out a lifetime mortgage is also

a way of reducing any potential future

IHT liability. And if clients feel uncom-

fortable with the idea of potentially

not leaving any of the value of their

property to their loved ones, they can

take out a guarantee which ensures

that a certain percentage of the value

of their property is left to their bene-

ficiaries when they die, no matter how

long they live and how much interest

they accrue.

Historically, the British have had a

slight obsession about leaving their

property to their loved ones. But per-

haps the table is starting to turn. It

wasn’t so long ago that as a nation we

baulked at the idea of debt unless it

was to buy a property, or maybe a car

at a push. That all

changed with the

advent of credit

cards and cheap

borrowing, as

well as

generational shifts in attitude towards

debt.

Much the same could be said for prop-

erty. People are living a lot longer in

retirement, and it seems unrealistic to

expect them to sit on what is likely to

be the single biggest asset they own.

People don’t necessarily want, nor

need, to downsize, so a lifetime mort-

gage gives them access to this much

needed money, which they can enjoy

tax free.

Research more 2 life recently carried

out into Retirement Lending seems

to bear this out – 44% of homeown-

ers aged 45 and above now consider

their property wealth as part of their

retirement planning including 28% of

those aged 65+. And a similar number

of those over 65 say they would pre-

fer to use their home equity to fund

retirement because of the favourable

tax treatment.

This shift in attitude, combined with

better value and more flexible prod-

ucts, will bring the lifetime mortgage

right into the centre of retirement

planning, perhaps dawning an era of

living on property, not pensions.

Contact more2lifeTel: 08454 150 150

Email: info@more2life.co.uk

Visit: www.more2life.co.uk

4 Lifetime Mortgage Insight - Issue 3 - June 2015

Why property wealth should be considered by those wanting to clear an interest only mortgage

Research from the FCA sheds some light on the number of

homeowners who are likely to be affected by this over the

coming years. The overall message is worrying: 2.6 million

interest-only mortgages due for repayment by 2041. As

many as 48% of these homeowners face a shortfall at re-

payment day of an average around £71,000 and as many

as 260,000 have no repayment vehicle of any kind in place.

The recent arrival of the pension freedoms means

that people aged over 55 who have such a shortfall can

choose to use their pension pot to clear the debt, if they

so wish.

However, while the increased flexibility of the pension

changes has been welcomed, the need for retirement plan-

ning has never been so important. Many consumers are

unaware of the tax implications a withdrawal from their

pension pot could have, and rather frighteningly, many ar-

en’t aware that if you take cash from your pot and fail to

inform all other pension firms holding your retirement sav-

ings within 31 days you could face a fine.

With so many changes, it’s important that people ap-

proaching retirement seek advice from a financial adviser

and understand the best option available for their circum-

stance. In turn, financial advisers must ensure that when

they’re giving advice on retirement planning they’re taking

a holistic approach. This means looking at all of their client’s

assets, and considering the property alongside any pension

pots and investments.

Releasing property wealth through a lifetime mort-

gage could be a more sensible solution for clearing resid-

ual debt when compared to releasing cash from a pension

pot. Where a withdrawal from a pension which is above the

25% tax-free allowance carries significant tax implications,

a lifetime mortgage is a tax-free way of raising a cash lump

sum.

Recent developments in the lifetime mortgage market

also mean that customers have a wider range of options to

choose from, allowing them to tailor a product to suit their

individual needs while continuing to be protected from the

product safeguards. This means that if they want to

service the interest on the mortgage, they can. Or, if they

want to pay down the mortgage, they can choose to make

capital and interest payments.

Where clients are raising money to clear their outstanding

mainstream mortgage, releasing the capital locked in their

homes through equity release offers a sensible alternative

to withdrawing a pension pot in one go.

Contact Retirement AdvantageTel: 0800 068 0212

Email: er-support@retirementadvantage.com

Visit: www.retirementadvantage.com

By Alice Watson, Product and Communications Manager, Retirement

Advantage (formerley Stonehaven)

For those approaching retirement, the biggest financial worry is often carrying residual mortgage debt into retirement.

5Brought to you by The Premier Equity Release Club. Contact our free helpdesk on 0800 612 5423.

Should the pension pot be used to clear an

interest only mortgage?By Faye Moutzouri, The Equity Release Council

Pension freedoms are enabling people to use their pots to

clear interest-only mortgages soon nearing their expiry

date. This solution may be suitable for many however it

needs attention so that this option doesn’t affect an indi-

vidual’s entitlement to benefits. This is an area that advis-

ers need to take into consideration when looking at clients’

financial options in order to inform them of the potential

repercussions.

At the same time, the newly introduced pension rules have helped, and will continue to help, towards the main-

streaming of equity release in financing later life. For some,

releasing equity may be a more efficient solution to clear

their existing mortgage than extracting their pension pots.

New pension rules can facilitate individuals to get more

from their pots in their early retirement stages and help

pay off an existing mortgage, while they could later use

their equity to supplement their income, and/or fund home

adaptations and future care costs.

Alternatively, people may take advantage of the new rules

to pass their pension pot on to their heirs tax-free; and turn

instead to equity release.

For that matter, holistic consideration of assets

and what they can offer in terms of returns is crucial in

planning for a long retirement. The pension pot, savings

and the house, should all form elements of peoples’ long

term financial planning based on their requirements, life

stage, and on the impact of each one of them on

inheritance, benefits and tax.

Times are changing and customer profiles do too especially

if we are to look at the Equity Release Council’s Market Report findings illustrating an increase in

the percentage of customers aged 55-64 (from 17% in

H1 2014 to 20% in H2 2014). Equity release is rapidly be-

coming mainstream not least as a result of the standards

and safeguards of the contemporary market. The concept

of equity release as a ‘last resort’ per se is gradually being

changed so that it forms a natural part of later life planning.

Demand for equity release will keep on increasing. The

industry needs to continue investing in its reputation

to help erase once and for all the scandals of previous de-

cades. Emphasis should also be placed on distribution. Ad-

visers should increase substantially in terms of numbers

but with caution to upholding standards and to ensuring

carefully managed processes to avoid misselling cases. Ad-

ditionally, more high street names in the sector along with

product innovation will help the further development of

the market.

Contact The Equity Release CouncilTel: 07557 856 705

Email: fayem@equityreleasecouncil.com

Visit: www.equityreleasecouncil.com

Image: Howard William

6 Lifetime Mortgage Insight - Issue 3 - June 2015

Rate changes from 1st April 2015Lender Date change Product Original rate Current rate Rate change

Aviva 20/4/2015 Flexi 5.16% 5.1% v 0.06%

20/5/2015 Flexi Enhanced (5.74% system) 5.10% 5.40% ^ 0.3%

Lump (6.79% system) 5.21% 5.48% ^ 0.27%

Please note with Aviva each case is individually assessed on the pricing tool – 0800 612 5423

Hodge Retirement 4.39%

Lifetime Flex 6.19%

Lump 5.99%

Just Retirement Roll up 5.59%

1/4/2015 Max lump Increase LTVs 5.99% Higher LTVs up 3%

5/6/2015 Max lump Increase LTVs 6.29% ^ Higher LTVs

Enhanced 6.39%

Just Retirement - offer PRICE MATCH on Loans over £20,000 for 60-74 PLUS £500 CASH BACK

LV= Flexible 6.24%

Lumps Sum 5.99%

More2life Tailored 70 5.69% ^ £250 CB

Tailored Enhanced 6.43% 50K. £75=£90075K.125=£1400£125K.175K = £1750 & £175K+ = £2250

17/4/15 Interest Increase LTVs ^ Higher LTVs upto 4%

20/5/15 Tailored Increase LTVs ^ Higher LTV’s up to 2%

2/6/15 Tailored healthy Increase LTVs ^ Higher LTV’s up to 1.9%

Newlife Flexible 5.05%

Flexible Plus 5.25%

Lump 5.75%

Partnership Lump 6.35%

Pure Draw Down 1 6.39%

Draw Down 2 6.39% 5.99%

Lump 1 6.19%

5/6/2015 Lump 1 6.49% ^ Higher LTVs

Lump 2 5.99% v

5/6/2015 Lump 2 6.29% ^ Higher LTVs

4/4/15 Lump 1 Increase LTVs Higher LTVs up to 3%

4/4/15 Lump 2 Increase LTVs Higher LTVs up to 3%

28/5/15 New Max DD1 Increase LTVs 6.45% Higher LTVs £800 broker & £600 sols, no ARR and free val

28/5/15 New Max DD2 Increase LTVs 6.33% Higher LTVs £600 Solicitors and free val

Retirement Advantage (formerly Stonehaven)

11/5/15 Interest-Gold 5.6% Higher LTVs up 5%

11/5/15 Int Platinum 6.49% Higher LTVs up 5%

11/5/15 Lump Gold 6.05% Higher LTVs up 5%

11/5/15 Lump Platinum 6.31% Higher LTVs up 5%

11/5/15 Voluntary Gold 6.16% Higher LTVs up 5%

11/5/15 Vol Platinum 6.54% Higher LTVs up 5%

11/5/15 ALL range Increase LTV’s Higher LTVs up 5%

Retirement Advantage 16th March switch from gilts to % ERCs Year 1-5 = 5% year 6-8 = 3% year 9 + = nil.Retirement Advantage 16th March offer reserves on all of range with rate loading of 0.2%

7Brought to you by The Premier Equity Release Club. Contact our free helpdesk on 0800 612 5423.

Should the pension pot be used to clear an interest only mortgage?

Contact James Young, Hodge LifetimeTel: 07977 562 422

Email: james.young@hodgelifetime.com

Visit: www.hodgelifetime.com

In retirement clearing any debt is a good thing as this pro-

vides immediate increased disposable income,

however there are a number of issues that retirees need

to consider.

If the client is going to consider using their pension fund/s

for paying off debt then they need to look carefully at the

pros and cons and for this and independent advice must be

taken.

There are a number of potential pitfalls involved in using

the pension pot to achieve this desired goal, however

there are also a number of alternatives that should be con-

sidered too, such as help from family, using other available

funds/assets or as an alternative, using equity release, to

name but a few.

No decision should be taken lightly, there are consequenc-

es from all options and it’s about the client finding the right

one for them. Therefore, independent advice is an absolute

must to ensure the correct course is taken.

Contact BridgewaterTel: 0800 032 2118

Email: enquiries@bridgewaterequityrelease.co.uk

Visit: www.bridgewaterequityrelease.co.uk

Intermediary guide for the Retirement Mortgage The Retirement Mortgage from Hodge Lifetime has filled the

gap between the residential mortgage market and the tradi-

tional roll up equity release market.

Designed to offer the flexible features of a residential

mortgage alongside the benefit of a lifetime term, customers

are required to make monthly interest payments and can also

make capital repayments of up to 10% per annum in the first

five years. From year six onwards, the loan can be repaid in

part or full with no early repayment charge.

The Retirement Mortgage is available solely via

financial intermediaries and this short guide has been pro-

duced as a ready reckoner on product features, customer

profiles and offering hints and tips on affordability and evi-

dence

For a copy of the guide or for further information please con-

tact your Business Development Manager on 02920 371

725, email info@hodgelifetime.com or visit

www.hodgelifetime.com

This article is intended for the use of financial intermediaries only.

The Premier Equity Release ClubS h a r i n g w i t h y o u t h e r i g h t w a y t o d o E q u i t y R e l e a s e

www.thepremierequityreleaseclub.co.ukhelpdesk@thepremierequityreleaseclub.co.uk

0800 612 5423

Equity Release & Holistic PlanningBy Rob Brennan, Compliance Director, The Right Equity Release

Experts in the Equity Release industry have been debating the expected fallout from the recent pension reforms. Will it effect lending? If so, by how much?

I suspect that we will not know the actual answer until later

in the year, perhaps into the following year but one thing is

for sure, the consumer now has far more choice about

how they fund their retirement. It follows that options

allow for choices and this means that there are more op-

portunities to make bad decisions. Going forward quality

advice will be even more essential and possibly more com-

plicated than it has been in the past.

Advisers that have mortgage and equity release permis-

sions will need to work hand in hand with those who are

qualified and licensed to provided holistic financial planning

where unvested pension pots exist. It is probable that our

clients may be best served with a combination of tax effi-

cient, flexible pension advice, hopefully ensuring that in-

come is available into the future whilst using their property

to fund capital expenditure.

Debt repayment, whether it is secured or unse-

cured will continue to be an issue in the years to come. Ask

most retirees if they would like to pay £10,000 off credit

card debt or have £500 per annum for the rest of their lives

and they are likely to opt for the debt repayment option. It

is usually the same answer with mortgage debt given that

lenders are not extending lending terms. These options

could require advice in terms of pension options, attitude

to risk, tax implications and investment opportunities. This

advice must come from properly licensed advisers.

For the British, house ownership is emotional, in general,

we don’t see our home solely as an investment. The com-

bined resources of property and pension must be used in

order to ensure that our clients receive the best possible

outcome in their retirement.

The government were right when they said they trusted us

not to go out and blow our pension pots on Lamborghinis,

I for one will not be buying shares in the company but the

consumer does have needs. Those needs might not be as

exciting as a super car but they are there and they are real.

A combination of good advice and correct asset utili-

sation will ensure that those needs are met for those who

have the luxury of choice.

Contact Rob Brennan, TRERTel: 07816 821 309

Email: rob.brennan@therightequityrelease.co.uk

Visit: www.therightequityrelease.co.uk