Introductory slide this can be deleted by advisers
Introductory slide – this can be deleted by advisers Growing your equity release network For financial adviser use only. Not approved for use with customers For use with financial advisers not qualified in equity release and professional referrals network as discussed in ‘Growing your equity release network: Building your professional connections’. This template is designed for use in one-to-one meetings with potential referral partners. You can use it as a base for your own presentation, changing it to fit your own brand tone of voice. When you meet with potential referrals partners, you may also like to use the ‘Customer profile guide’. This will help to explain the types of customers they may encounter. As lifetime mortgages account for more than 99% of the equity release plans sold, (1) this presentation focuses on lifetime mortgage plans only. 1) Equity Release Schemes UK, May 2018 Mintel report PF 011301 04/2019 Aviva: Internal Please note that it is your responsibility to ensure that your communications are compliant. Aviva does not provide any guarantees as to accuracy and cannot accept responsibility for any losses arising from the information shown in the following pages.
Slide 1 (Mandatory) Equity release referrals <Insert adviser name> <Insert company name> <Insert disclaimer> The content of this presentation should not be construed as legally binding on [ name of Adviser firm ] and we do not give any warranties as to the accuracy of the information. NB: The above disclaimer is for illustrative purposes only. You should ensure that any disclaimer provided by you is suitable for your purposes. Aviva: Internal
Slide 2 (Mandatory) Equity release referrals Name: <insert name> Qualifications: <insert qualifications> Qualified to advise on equity release solutions through the <insert as appropriate Chartered Insurance Institute (CII) / London Institute of Banking & Finance)>. Aviva: Internal Role: <insert job title> Contact details: <insert email address / phone number> Company name: <insert company name> Company address: <insert company address> Company information: <insert brief summary of adviser firm’s expertise>
Slide 3 (Optional) What are the reasons for choosing equity release? 31% Short term debt (1) 22% outstanding mortgage (1) 64% Home improvements (1) UK Population 2027 27% Gifting family or friends(1) 20. 7% Over 65 years old(2) (1) UK Equity Release Market Monitor Full Year Report 2018 (2) Office for National Statistics, Overview of the UK population November 2018* (3) UK and Irish Housing Markets: a first-time buyer perspective report September 2017 (4) Consumer attitudes towards Property Ownership May 2017 Aviva: Internal *Contains public sector information licensed under the Open Government Licence v 3. 0 30 yrs old Average of a first time buyer (3) 71% Owning my own home should be a financial priority. (4)
Slide 4 (Optional) Equity release: market overview ONS House Price Index(1) Location January 1992 January 2018 Growth UK average £ 62, 000 £ 281, 000 353% London average £ 80, 000 £ 530, 000 562% Market drivers • Mortgage availability (high loan to value ratios) 21% of people will use property-related sources to fund their retirement, such as downsizing or equity release. (2) • Low interest rate environment (post financial crisis) • Low level of housing supply creates demand (1) Office for National Statistics House Price Index, UK: November 2018* (2) Retirement Planning UK 2019 Mintel Report *Contains public sector information licensed under the Open Government Licence v 3. 0 Aviva: Internal
Slide 5 (Mandatory) Lifetime mortgages: product overview Lifetime Mortgages: • Typically come in the form of a ‘lump sum’ or ‘drawdown facility’ • In both forms, a loan is secured on the property, after which interest is added annually on a compound basis • The following product features will normally apply to all lifetime mortgage schemes: § No loan repayments are required until the client dies or goes into long-term care, subject to the provider’s terms and conditions § No negative equity guarantee § Option to make voluntary repayments § Interest rates are fixed or capped Aviva: Internal Please note - not all providers offer all types of equity release and products vary between providers
Slide 6 (Mandatory) Lifetime mortgages: product overview The drawdown product is the more popular type of lifetime mortgage(1) Lump sum • Releases a one-off lump sum • May allow clients to borrow more initially than a drawdown product • Interest is charged on the full amount borrowed from the outset. Drawdown • Releases a smaller initial lump sum • Allows access to further releases in the future by setting up a cash reserve • Interest is only charged as each amount is released. Key considerations • • • Lifetime mortgages are only available to homeowners over 55 and minimum property values apply May affect clients' tax position and eligibility for means tested benefits Reduces inheritance available for beneficiaries, which can reduce to nothing Substantial penalties for ending the lifetime mortgage early Costs to set up the scheme May affect ability to move home or may be unable to release more equity in the future. (1) Equity Release Council , Spring 2019 Aviva: Internal
Slide 7 (Optional) Equity release and your clients: Lifetime mortgages • UK homeowners over the age of 55. • Designed for clients who have no mortgage or only a small mortgage on their property. This mortgage must be repaid by the proceeds of the loan. • The amount the client is able to borrow depends on the value and type of property, and other factors including their individual circumstances. Example loan to value Age 65 Age 75 Couple Around 29% Around 40% Single Around 30% Around 41% The actual loan to value will depend on the provider. Aviva: Internal The actual loan to value will depend on the client’s personal circumstances. With a lifetime mortgage, the amount a client may be able to borrow depends on their age, residential status and the value of the property, along with a range of other variable factors.
Slide 8 (Optional) Equity release referrals Lifetime mortgages: examples Upsizing Intergenerational lending Later life Supplementing income Divorced client buys house outside of price bracket. Aviva: Internal Parent/grandparent helps younger family member or first time buyer get on the property ladder. Client needs finance for home adaptation in later life. Client needs to supplement their retirement income
Slide 9 (Mandatory) Equity release: client safety and protection Equity Release Council – aims • To ensure a safe equity release market for consumers. • Works with consumers, industry and policymakers to improve awareness and understanding of equity release and the potential for housing wealth to help people over the age of 55 in the UK. Equity Release Council – members and standards • Members include equity release providers such as Aviva. • Standards Board ensures products are safe and reliable for consumers. • Members offer products which conform to best practices. • In 2017 approximately 95% of all UK equity release lending was from Equity Release Council members(1) Equity Release Council, January 2018 Aviva: Internal
Slide 10 (Mandatory) Independent advice 1. 2. Client’s personal situation Alternatives to equity release Tax position Family/beneficiaries Will Independent legal adviser Estate planning (Inheritance Tax) Health/life expectancy Aviva: Internal Downsizing Local authority grants Savings and pension income Financial assistance from family member(s) State benefits 3. Product solution Balanced overview of all options Overview of equity release products Understands the features, risks and benefits of the suitable product Recommends the most appropriate solution based on the individual’s personal circumstances.
Slide 11 (Optional) Equity release opportunities Baby boomers Longer lives • Approaching retirement • 2027 - 20. 7% UK population over 65 • Asset rich (2) • Need to make money stretch further • Home owners Debtors Home improvements • 31% repay short term debt (1) • Equity release for home improvements - 64% (1) • 22% pay off outstanding mortgage (1) UK Equity Release Market Monitor Full Year Report 2018. (2) Office for National Statistics, Overview of the UK population November 2018* *Contains public sector information licensed under the Open Government Licence v 3. 0 Aviva: Internal
Slide 12 (Optional) Potential clients for a lifetime mortgage Equity release referrals Mick and Anita Issue: Limited Savings Need: Intergenerational Wealth Transfer Aviva: Internal
Slide 13 (Optional) Potential clients for a lifetime mortgage Equity release referrals Jane Issue: Medical condition Need: Time with family Aviva: Internal
Slide 14 (Optional) Potential clients for lifetime mortgage Equity release referrals Donald Issue: Declining health Need: Home adaptations Aviva: Internal
Slide 15 (Optional) Potential clients for a lifetime mortgage Equity release referrals Louise Issue: Income gap Need: Supplementing income and leaving an inheritance Aviva: Internal
Slide 16 (Optional) Potential clients for a lifetime mortgage Equity release referrals Martin Issue: Limited savings Need: Essential home improvements Aviva: Internal
Slide 17 (Optional) Why referrals? Equity release referrals • You already have direct access to clients over 55, who are planning for retirement and could benefit from equity release. • Maintain client cases that may be otherwise lost. • Help promote client wellbeing and financial stability. • Establish your reputation for helping clients in later life. • Enjoy a fee for your role as referral partner. Aviva: Internal
Slide 18 (Mandatory) Adviser company name and registered company address Aviva: Internal
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