- Boosting retirement finances, home improvements and helping children buy a property among the main reasons homeowners would release equity
- Benefits include no negative equity guarantee and ability to make optional repayments
- Santander UK announces extension of its partnership with L&G to refer homeowning customers, over 55, for later-life lending advice
New research from Santander UK shows that a quarter of homeowning adults would consider using equity in their property to support their financial position in later-life1. The findings come as the mortgage lender today announces the extension of its partnership with Legal & General (L&G) to expand access to later-life lending options to homeowning customers, aged 55 years and over 2.
When asked what homeowners would release equity for, just over a third (33%) said they would access money to boost their retirement finances, around one in four (23%) would use it to complete home improvements, while 15% said they would use some of the equity in their home to help their own children onto the property ladder.
Aaron Shinwell, Chief Operating Officer, Homes division at Santander said: “Looking at options to manage money into retirement is increasingly important in today’s society and as a major mortgage lender, we know that many customers are keen to understand how they can make the equity in their property work best for them.
“Since 2016, we have partnered with Legal & General to help customers access the equity within their property, and we’re pleased to open this support to all mortgage customers aged over 55, to help them understand and access the choices available to them in later-life."
From today, Santander will contact customers, who it believes would be eligible for the later-life lending options offered by Legal & General, to provide more details about the options available under the partnership. Interested customers can contact Santander’s mortgage team to discuss their current situation and what they’re looking to achieve from later-life lending and, where appropriate, customers will be introduced to Legal & General’s qualified advisors to discuss the options available.
Craig Brown, Chief Executive Officer at Legal & General Home Finance said: “With almost eight years in collaboration, we are excited to be expanding our partnership with Santander, offering lifetime mortgage solutions to more customers. Over the years, we’ve seen a growing demand for later life lending products, which we expect to continue, in line with high values of property wealth and changing retirement needs. We’re dedicated to making sure that both customers and advisers are supported and that customer outcomes are at the front and centre of every process.”
Santander’s research also showed that worries about understanding the costs associated with equity release (29%), having nothing left for children to inherit (27%) and concerns about owing more than the property is worth (24%) put some homeowners off using equity in their homes through a later-life mortgage. Furthermore, one in five homeowners were worried about using an unreputable company, while one in ten said they didn’t know where to turn for help or advice.
Jim Boyd, Chief Executive of the Equity Release Council, said: “We know that the myths surrounding equity release, and lifetime mortgages may be putting people off exploring products that could help unlock their finances into retirement, and it’s our role to make sure that the industry presents the facts and holds itself to the highest of standards for customers. It’s great to see Santander and L&G, both members of the Equity Release Council, acting in partnership to bring trusted advice to a wider range of customers, and making sure they are fully informed about the choices available to them.”
A lifetime mortgage can offer customers the following benefits:
- Tax-free cash – the money borrowed with a lifetime mortgage remains tax-free.
- Release equity when it is needed – there’s flexibility to borrow more in the future if the full sum is not taken out upfront3.
- No regular payments – there’s no need to make any monthly interest payments.
- Optional repayments – there is choice to make partial repayments to manage the amount owed on the loan and interest4.
- No negative equity guarantee – Legal & General guarantees that the beneficiaries will never have to pay more than the sale value of the property provided the property is sold for reasonable market value, and terms and conditions are met.
More information on lifetime mortgage can be found on the Legal & General website: Lifetime mortgages | What is a lifetime mortgage? | Legal and General
- Ends –
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Later life mortgage:
A lifetime mortgage is a type of equity release5, a loan secured against a property that allows for tax-free cash to be released without the need for the homeowner to sell and move-out of their home. There’s nothing to repay until the customer dies or moves permanently into long-term care. Customers can choose to pay off some, or all of the monthly interest, reducing the interest added over the life of the mortgage and the final amount owed.
Notes to Editors:
1. Research conducted by Opinium Research on behalf of Santander UK. Sample was nationally representative of 2,000 UK adults (aged 18+). Fieldwork was undertaken 20th June – 23rd June 2023. All data has been weighted to be representative of the UK population.
2. Previously the ability to access later life lending was offered only to customers coming to the end of their Interest Only product term.
3. Taking out small sums later may alter the interest owed.
4. Full repayment of the lifetime mortgage will be subject to an Early Repayment Charge (ERC)
5. To be eligible to release equity from your home, you must fit the following criteria:
a. Be aged 55 or over.
b. Own (or be buying) a home, with little or no mortgage left to pay.
c. The home must be worth at least £70,000 or £100,000 depending on property type.
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 31 December 2022, the bank had around 19,000 employees and serves around 14 million active customers, via a nationwide branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the FCA and the PRA in the UK. Santander UK plc customers’ eligible deposits are protected by the FSCS in the UK.
Banco Santander (SAN SM, STD US, BNC LN) is a leading commercial bank, founded in 1857 and headquartered in Spain. It has a meaningful presence in 10 core markets in the Europe, North America and South America regions, and is one of the largest banks in the world by market capitalization. Santander aims to be the best open financial services platform providing services to individuals, SMEs, corporates, financial institutions and governments. The bank’s purpose is to help people and businesses prosper in a simple, personal and fair way. Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising €220 billion in green financing between 2019 and 2030. At the end of 2022, Banco Santander had €1.3 trillion in total funds, 160 million customers, 9,000 branches and 206,000 employees.
About Legal & General
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management at 31 December 2022 of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
About Legal & General Retail
Legal & General Retail helps create brighter financial futures for all our customers. The division covers the savings, protection and retirement needs of our c.13 million retail policyholders and workplace members.
As of 31 December 2022, L&G had total individual annuity sales of £954 million, and issued £632 million of Lifetime Mortgages and Retirement Interest Only Mortgages. Our Workplace pension platform served 4.9 million members, while our Protection businesses gave peace of mind to more than 6.3 million UK life insurance, 1.8 million group and 1.5 million US customers, taking in £3.1 billion of gross written premiums.
About the Equity Release Council
The Equity Release Council is the representative trade body for the UK equity release sector with more than 750 member firms and 1,900 individuals registered, including providers, funders, regulated financial advisers, solicitors, surveyors and other professionals.
It leads a consumer-focused UK based equity release market by setting authoritative standards and safeguards for the trusted provision of advice and products. Since 1991, nearly 650,000 homeowners have accessed more than £45bn of property wealth via Council members to support their finances.