Just Retirement has just announced record overall sales figures for the last financial year, stating that annuity sales have increased by nearly 34% in the past 12 months to June 2012. The company said overall sales were a little under £1.5billion, which represents an increase of 29% on the previous 12 months. The vast majority of their profits have been driven by annuity sales which totalled nearly £1.2 billion. In addition to higher annuity sales, the company also reported increased revenues from it’s Equity Release business which rose 11.4% to £269m.
Company CEO Rodney Cook said part of the company’s success was down to it’s innovation in the annuity market. He said…”…we launched our innovative fixed-term annuity product one year ago, the first in the UK to have an enhanced annuity conversion feature, and sales have reached target levels as increasing numbers of financial advisers are introducing the solution into their retirement options.” Mr Cook added that he thought the Equity Release market still had “significant potential”, perhaps indicating that there was still room for further growth sales. The current economic climate coupled with falling retirement incomes would seem to indicate that Equity Release is likely to become more popular in the years to come. Low annuity rates and poor returns from savings accounts means releasing the equity in the home is often the only viable option to fund retirement nowadays. According to Just Retirement’s own survey into the matter entitled ”The Role of Home Equity in Retirement Planning” nearly half of all the respondents they spoke to did not know where to seek advice on the matter, with 9 in 10 not being bale to name an Equity Release provider. Steve Lowe from Just Retirement said…”…the equity release market сurrеntlу оnlу reaches а small proportion оf thоѕе whо соuld benefit.”
With an increase in the number of over 50′s, many of which will have equity in their homes, the market is certain to expand in the coming years. In fact the Just Retirement report found that 84% of homeowners aged between 60 and 79 had equity in their property worth at least £200,000. With changes to the regulatory system and a promotional drive, it would seem next year’s Equity Release sales are likely to increase well above the figures announced today.