2024 surge in later life demand

Advise Wise saw more than double (139% increase) in the number of customer searches in early 2024 compared with December as both advisors and customers seek to start the new year with finding solutions to the cost of living crisis.

The majority of customers (52%) were still seeking maximum release, with 32% having a defined lump sum in mind and 16% looking at drawdown options, where they can take a small amount upfront but have access to a facility to draw cash down in the future at potentially lower rates.

The average amounts released for lump sums were around the £118,000 mark with drawdown plans at a lower £61,000 which is broadly in line with how 2023 ended. The housing market may start to have an effect on these depending when it starts to show signs of recovery alongside lenders being able to offer higher loan to values (LTVs) when interest rates start to fall during the course of the year.

In terms of plan features nearly 6% of searches are wanting plans with some form of monthly payments up from 4% in 2023 and fixed early repayment charges still remain popular with customers and advisors on plans.

Advise Wise have also seen signs of improvement in the range of solutions for customers, with an increase of 163% in the number of searches for RIO products in the start of 2024 as advisors take on board their responsibilities under Consumer Duty and start looking at a wide range of options rather than just equity release.

Finishing off a bumper year of technology advancements based on advisor feedback there continues to be solid growth with an 82% increase in new users in the the first month of 2024 to the platform and more than double the number of firms joined in January compared to December as advisors and firms switch from legacy systems.

Benjamin Well, Head of Product and Development comments “Last month we saw a very positive start of the year in terms of platform activity and product sourcing, which reflects the pressing need for solutions amid the ongoing cost of living crisis. There is also an increased focus on a variety of solutions for clients, with a substantial rise in searches for RIO products, as advisers are embracing a broader range of options moving beyond traditional equity release.”

He continues “It’s worth noting a change in customer preferences with the rising interest in plans with monthly payments, while fixed early repayment charges remain popular, indicating a continued appeal for stability among both customers and advisors. We’ve also assisted in an impressive growth in users, signalling a positive response from many new advisors and firms, moving towards our innovative and user-friendly platform.”