For many people, the equity in their homes represents a significant, if not their largest, pool of savings. The Office of National Statistics found that property was the largest category of wealth accumulation in the UK after private pensions.1 And Scottish Widows’ 2023 Retirement Report of the UK found that home equity release could provide an additional £60,000 to fund retirement. In
the Southeast, this doubles to over £120,000 and in London it is over £170,000.2
However, it is important to highlight that accessing the equity in a home for non-housing uses has difficult history. There have been cases of vulnerable people being sold inappropriate, high-cost options, often resulting in poor outcomes for end-clients. In fact, the FCA recently released announced the results of an investigation of later-life mortgages, which found “poor advice and misleading promotions” ongoing in the UK in this area.3
These two facts – that homes are a significant savings vehicle, and that current practices are leading to poor advice – seem like a call to action for the wealth management industry. If home equity could be better integrated into a holistic financial plan, with trusted advice provided, then would this situation shift? And would the looming retirement income crisis2 in the UK look different?
At this juncture, it seems important that wealth management technology provides end-clients and financial advisers with the ability to integrate this important asset into holistic financial planning. As part of our joint effort to better incorporate home wealth into financial technology, Nokkel and FNZ partnered to uncover current financial adviser perceptions of house wealth in the United Kingdom.
To explore financial adviser attitudes and concerns, we asked the lang cat to conduct research on our behalf.
This report shares the results of that research, along with some observations about the state of the industry, home equity’s relationship to Consumer Duty, and perspectives from the lang cat’s Director of Public Affairs.
Download the full report here.
References
1. Office of National Statistics, Household Total Wealth in Great Britain: April 2018 to March
2020, released January 2022.
2. Scottish Widows, 2023 Retirement Report, released June 2023.
3. Financial Conduct Authority, Press release: Review of later-life mortgages finds poor
advice and misleading promotions, released September 2023.
