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The European Pensions and Property Asset Release Group (EPPARG) is pleased to announce that 60plusbanken has joined EPPARG as a member.

60plusbanken is part of Bluestep Bank AB (publ) and was launched in Sweden in 2020. It offers tailor-made loan solutions for people over the age of 60 who own their home. Through the 60plus loan 60plusbanken helps customers access and use  capital tied up in their property, in a safe and responsible way, without having to move. Bluestep Bank AB (publ) is the leading specialist mortgage bank in the Nordics, active in Sweden, Norway and Finland. Bluestep Bank AB (publ) is under the supervision of the Swedish Financial Supervisory Authority.

Speaking on behalf of EPPARG, Steve Kyle, Secretary General, commented:

“It is a pleasure to welcome 60plusbanken on board as a member of EPPARG. We are aware that the Swedish market for equity release is one of the most well-developed and sophisticated in Europe, and we note the positive growth achieved by 60plusbanken since its launch, despite the challenging economic context.”

“We look forward to engaging with 60plusbanken as we seek to continue to safely grow the European market for equity release, with Sweden as an example of how elderly customers can be effectively served and supported, and to strive for high standards and an appropriate regulatory regime for equity release solutions.”

Commenting on behalf of 60plusbanken, Sandra Lillienberg, Head of Equity Release, said:

“I look forward to contributing to nuancing the image of equity release through the important work of EPPARG. 60plusbanken, and equity release in general fills an important role in society for those excluded from a secure retirement through low incomes and safeguarding that more people can access capital that has been accumulated over a lifetime of hard work. The work of EPPARG is essential in spreading knowledge and allowing for these products to continue to grow, but responsibly and sustainably.” 

EPPARG is the principal trade body representing the interests of home equity release providers in Europe. Countries with EPPARG representatives or associates make up over 75% of all the countries in Europe with a home equity release market.

The European Pensions and Property Asset Release Group (EPPARG) has today announced the launch of high level standards on home reversion, at a time where this equity release solution is growing in a number of countries in Europe.

The standards, known as the “EPPARG 10” on equity release products through the sale of real estate, have been developed by EPPARG, as the leading European trade association for the equity release in industry in Europe, whose members and make up more than 75% of the home equity release market in Europe.

The standards highlight that home reversion schemes shall be lifetime products, whereby upon the transfer of the ownership of their property, customers shall receive payment in the form of a one-off sum or a lifetime annuity, or a combination of both, and shall have a lifelong exclusive right of residence and right of use.

The standards make clear that ongoing maintenance shall be conducted by the owner of the property, while the customer must be granted the right to carry out any conversions that are necessary for the person to continue to live there.

Consumer protection is a key focus of the standards. In exceptional circumstances, where a customer needs to move to a different property, the owner will seek to offer a moving house option at reasonable costs, and there are also protections for consumers if the current owner should seek to sell on the property asset to a third party.

In addition, the standards also set out provisions on ensuring transparency for consumers on product variations and the basis for the offer calculation and, in the case of lifetime annuity providers, on special risks in the event of an early death. The standards also provide that all information should be given to customers by competent, knowledgeable and duly authorised persons, and that a checklist must be signed by both the customer and provider before a contract for a home reversion product is signed, among others.

Commenting on the standards, Steve Kyle, Secretary General of EPPARG, said:

“Home reversion products have an important role to play in the equity release landscape across Europe, and in a number of countries, such as Germany and Poland, for example, home reversion schemes are in fact the primary solution being offered on the market. This is a market which is also innovating, where a number of different models have been appearing on European markets in recent months.”

“EPPARG’s aim, through launching these standards, is to ensure that the home reversion market is able to grow safely and in a way which protects elderly customers and gives them additional options to supplement their income.”

Friedrich Thiele, Managing Director of Deutsche Leibrenten Grundbesitz AG, welcomed the new EPPARG standards and the framework set:

“With our transparent, secure and consistent advice, Deutsche Leibrenten has shaped the market for home reversion schemes in Germany. We welcome these new home reversion standards set by EPPARG, which we have already met for many years. It is important that the wider market can use the standards as a reliable guide to ensure the optimal set up of quality products and advice in the interests of the customer. We very much support this approach of self-regulation which is tailored to the European market.”

Robert Majkowski, CEO and Founder of Fundusz Hipoteczny DOM S.A. also supported the adoption of the new EPPARG standards:

“We are witnessing the dynamic development of the industry, not only at a global level, but also at a European and Polish level. I believe that EPPARG’s home reversion standards, which ensure a high degree of ethical behaviour, are very much needed. By adopting the EPPARG standards, beyond the good practice principles which we have established locally, we can prove that the equity release and home reversion market is highly professional and clients can feel safe. I would urge all market players offering this service in Poland, and across Europe, to act ethically and in accordance with the new EPPARG standards, which are also likely to boost confidence in our sector.”

The home reversion standards can be viewed here.

New EPPARG member SocioHypotheek B.V. has become the Netherlands’ first fully regulated mortgage lender focusing solely on elderly and lifetime mortgages.

SocioHypotheek B.V. has received its license from the Dutch Financial Authority (AFM) to originate and service mortgages, which makes the company the first financial institution in the Netherlands to clearly put its primary focus on the elderly and lifetime mortgages. It is also the first Dutch mortgage provider to align its interests with EPPARG to create a safe, reliable and fair equity release market in the Netherlands for both borrowers and investors.

The product, the SocioHypotheek, provides an opportunity for senior borrowers of 65+ years to unlock wealth locked in their homes. The SocioHypotheek represents an innovative new offer to Dutch residents as it allows them to make flexible annual payments that are agreed upon with the borrower and his mortgage advisor in advance of contracting the loan. 

Frans de Kievit, CEO of SocioHypotheek B.V. explained: “We offer lifetime mortgages with annual payments and a maximum Loan-to-Value (LtV) of 60%. This seems high compared to some other countries but the accruing interest of the first fixed interest period (5, 10 or 15 years) is already a component of the debt structure. As a safety measure, and to create the possibility of a No Negative Equity Guarantee, we’ve fine-tuned our solution to ensure that a borrower cannot reach this (60%) LtV before his or her 80th birthday. This makes the solution appealing for all parties involved”.

The average LtV and Loan-to-Income (LTI) in the Dutch mortgage market are relatively high but the strong payment commitment of Dutch borrowers, combined with the very strong social safety net, historically low percentage of defaulters and robust industry regulations make for a minimal credit risk. The total market for SocioHypotheek is estimated to be over €135 bn. On average, homeowners aged over 55 have over €200.000 of equity locked in their property. According to De Kievit: “combining the current mortgage climate with the expected rise in house prices provides a very positive outlook for the foreseeable future” 

Robbert Mulder, Business Development Manager at SocioHypotheek said: “It is a great time to offer institutional investors the possibility of entering the developing Dutch lifetime mortgage market. We are currently pioneering a solution that has the potential to create better lives for thousands of elderly homeowners by potentially unlocking over €100 billion of wealth that is currently ‘stuck’ in housing. Furthermore, I am very pleased to be able to represent SocioHypotheek and the Netherlands as an associate director of EPPARG to help develop a safe and responsible equity release market”.

Steve Kyle, Secretary General of EPPARG, which is the principal trade body representing the interests of home equity release providers in Europe, commented: “EPPARG has members from all across Europe who are engaged in developing a safe Home Equity Release market and we are delighted to welcome Sociohypotheek B.V. as a new and innovative member from the Netherlands.” 

“SocioHypotheek B.V. clearly recognises the importance of good consumer safeguards in this new, exciting and growing market, which has huge potential, and is determined to make a positive difference to the lives of elderly homeowners in the Netherlands,” added Mr Kyle. 

SocioHypotheek has secured its first round of funding to build its business case and to become the leading portal of releasing Dutch housing equity.

For more information about SocioHypotheek B.V. visit www.sociohypotheek.nl or contact investor.relations@sociohypotheek.nl SocioHypotheek B.V. is registered at the Dutch Chamber of Commerce under 77687795 and AFM Licensed under 12047556.

London, 28 April 2021: The European Pensions and Property Asset Release Group (EPPARG) has responded to the European Commission’s Green Paper on ageing, calling for innovative and sustainable financing solutions, including home equity release, at a time when the COVID-19 pandemic is exacerbating budgetary pressures upon EU Member States.

The European Commission launched its Green Paper on Ageing for public consultation in January 2021, which identifies a range of policy challenges when it comes to meeting the needs of an ageing population across EU Member States. The Green Paper reveals that the total cost of age-related public expenditure already exceeds 25% of GDP in the EU27, while the fall-out of fighting COVID-19 and the economic consequences of lockdown measures have posed further challenges.

Steve Kyle, Secretary General of EPPARG, commented:

“The budgetary pressures on EU Member States to provide for elderly populations are being exacerbated by the COVID-19 pandemic on both economic and health grounds. We believe that the current situation calls for urgent innovative and sustainable financing solutions which limit the intergenerational burden”. 

“The growth of home equity release solutions would allow elderly EU homeowners to safely unlock the value of the wealth that they have accumulated in their homes, which represent the largest asset for most people. The EU’s own figures show that more than two-thirds of the EU population own their own homes, while there is a high rate of home ownership among elderly populations in a number of EU countries, which exceeds 80% in Poland, Italy, Spain and Ireland, for example.”

In its response to the European Commission, EPPARG highlights the role of home equity release in reducing the risks of poverty in old age, by providing an additional option for elderly homeowners who are ‘asset rich but cash poor’ for consideration as part of pensions planning.

EPPARG considers that home equity release solutions have a dual role to play in contributing to fiscal and financial sustainability among EU Member States, both in terms of relieving the intergenerational burden on society and supporting intergenerational solidarity within the family.

With regard to pensions adequacy, EPPARG calls on the European Commission to take a more forward-looking approach and to encourage EU Member States to include home equity in the third pillar, which would significantly improve retirement outcomes. It also urges the European Commission to address funding challenges currently faced by market players.

Lennart Grabe, Deputy Secretary General of EPPARG, said:

“We consider that the EU is behind the curve globally when it comes to recognising the potential contribution of home equity release, noting that innovative approaches are being developed globally, with Australia already recognising home equity release as part of the third pillar, for example.”

“One of the main barriers to the expansion of home equity release markets in the EU is the lack of availability of funding. We urge the EU to ensure enabling financial market regulations and sympathetic capital treatment of home equity release solutions so that the EU market can reach its full potential, including facilitating cross-border funding solutions. We also anticipate that funders using returns on property assets over the long term will support the funding of ongoing private pension liabilities.”

EPPARG’s response to the European Commission can be viewed here. 

 

Deutsche Leibrenten Grundbesitz AG has raised an additional 25 million euros via a convertible bond. This indicates the level of trust placed in Germany’s market leader for property-based pension plans by the institutional investors involved. Operating in a market which demonstrates further demand growth, the Frankfurt-based company continues to provide a safe and secure product for its elderly customer base.

“The solid expansion work over recent years and our rigorous alignment towards the ESG-related criteria of our product range are attracting ever greater attention from the capital markets”, says CEO Friedrich Thiele. The bond scheme is based on an enterprise appraisal that values the company in excess of 300 million euro. Obotritia Capital KGaA remains the majority shareholder of Deutsche Leibrenten AG with a stake of 95 percent.

Obotritia’s founder, Rolf Elgeti, comments: “While the possibility of a property pension element as part of retirement financing was undervalued in the past, it has now firmly established itself on the market and is on the cusp of further development. The growth we have exhibited during the past year – despite the corona pandemic – has demonstrated that having your own home is not just a safe place to be, but also a way of financially securing a pension over the long term.”

Deutsche Leibrenten AG has filled a niche within the pension financing sector and it continues to expand successfully. “The product we offer makes us an intriguing partner for increasingly larger numbers of financial service providers. Alongside 450 brokers, we are now also operating in partnership with approximately 150 savings banks and co-operative banks which have identified property pension schemes as a long-term solution for their clients”, explains the CEO of Deutsche Leibrenten AG. Additional partnerships with important players in the financial sector are expected over the coming months.

Deutsche Leibrenten AG is currently managing about 110,000 square metres of residential space diversified throughout Germany. In 2020, despite the difficult underlying conditions caused by the corona pandemic, Deutsche Leibrenten AG 2020 signed new contracts with a total value of 120 million – double the volume versus previous years.

“We are aiming to maintain our successful path of growth and continue full steam ahead with the further development of this exciting area of using real estate-based pension plans”, says Mr. Thiele. “And in future we will continue to exploit the opportunities offered to us by the capital and financial markets.”

About Deutsche Leibrenten Grundbesitz AG – www.deutsche-leibrenten.de

Deutsche Leibrenten Grundbesitz AG offers pensioners the option of selling their property without having to move out of their home. The sellers have a life-long right of residence based on legal usufruct principles – all fully notarised and entered with priority ranking in the land register – and will receive a monthly pension and/or a one-off payment. The Frankfurt-based corporation acquires properties throughout Germany and is supported by its majority shareholder Obotritia Capital KGaA, based in Potsdam.

Deutsche Leibrenten currently owns more than 800 properties. This makes it Germany’s leading provider of property-based pensions, and the company is Germany’s only member of the European Pensions and Property Asset Release Group (EPPARG).

The UK Equity Release Council has launched a member endorsement mark as part of a brand refresh that reflects the modern equity release market.
 
The endorsement mark  provides a badge of trust for potential and existing customers to look for, reflecting the security which the Council’s standards provide.

It will act as a recognisable statement of quality that offers confidence and reassurance for consumers by embodying members’ commitment to quality and professionalism in the products and services they offer.
 
Members can use the new endorsement mark immediately, and the Council is encouraging them to adopt it as soon as practical, with a grace period which runs throughout 2021 during which time members are permitted to use the previous logo.
 
This year represents 30 years since the Council’s predecessor, Safe Home Income Plans (SHIP), established the first consumer-focused standards for equity release products and advice, bringing voluntary regulation to the market in 1991 ahead of the Mortgage Code’s introduction in 1997. Today’s standards have evolved over the last 30 years to complement statutory regulation since 2004 and provide what the Council believes to be the highest level of consumer protection for property-based lending in later life.
 
The new endorsement mark has been launched to members as part of a brand refresh which the Council has adopted to better represent the innovative and vibrant equity release market. This evolution forms part of a strategic programme of activity underway, including the appointment of a Risk, Policy and Compliance team to oversee the continuing revision and evolution of consumer-focused product and advice standards.
 
The Council also launched a new Competency Framework for advisers last month and has developed other adviser resources to support good practice across the market.
 
These milestones come at a time of significant growth in the Council’s membership. Over the last year, more than 100 firms have joined the organisation, taking the total number of member firms to 586, while individual membership has grown by almost 200 to reach 1,454.
 
The Council’s 2021 annual member census found 93% of respondents agree the safeguards and protections enable consumers to trust that equity release is safe and reliable.
 
Jim Boyd, CEO of the Equity Release Council, said:
 
“Over the course of 30 years of setting consumer-focused standards, the equity release market has been transformed to become part of mainstream conversations about funding later life. Today’s product range offers flexible finance to older homeowners, backed by robust safeguards and protections.

“At a time when people are living longer lives and have an unprecedented choice of options to release equity at affordable rates, our new member endorsement mark provides a sign of quality, professionalism and trust, by demonstrating to potential customers that members are committed to best practice in the products and services they offer.”

More information on the UK Equity Release Council is available here.

John Moriarty, Director at Seniors Money International in Ireland, shares the company’s experience of re-opening to new customers this year under a new retail brand Spry Finance against the backdrop of the pandemic, and sees a positive outlook for future market growth.

When Seniors Money Mortgages (Ireland) DAC – which is the only provider of lifetime loans in Ireland – re-opened to new applicants recently you also introduced a new retail brand, Spry Finance.  What was the thinking behind this?

Both Spry Finance and Seniors Money are divisions of Seniors Money Mortgages (Ireland) DAC, which is the Irish operation of the Seniors Money International group (SMI).  Spry Finance is the new retail division.  Its role is to promote the product and then guide people through understanding and applying for a Lifetime Loan.  The loan itself is still provided and serviced by Seniors Money, the lending division, which has been the leading lifetime loan lender in Ireland for over 15 years.  

Spry Finance was established to create a clear distinction between the loan origination role (generating leads and then providing information, support and guidance to those who are making the decision about applying for a Lifetime Loan) and the role of being the lender and servicer of the lifetime loans thereafter.  Until now both roles have been carried out under the Seniors Money name (so Spry inherits all that experience).  With the welcome and ever-increasing focus on consumer protections in relation to financial services, we believe that having a separate division with a specific focus on the sales and arranging phase will help the group maintain its position as the market-leader in the lifetime loans space in Ireland, both as an originator and as a lender.  

SMI has provided lifetime loans to clients around the world (Australia, New Zealand, Ireland, Spain and Canada) for nearly two decades now and we’ve learned along the way that, whilst loan origination and lending can sometimes feel like different business models with different economics and value chains, stakeholders (including customers, funders, regulators and shareholders) all want the same things ultimately.  They want confidence that the loans are sold safely and transparently – which is where Spry Finance is laser-focused – and then that the loans will be reliably managed right through from credit decision to loan maturity and collection – where Seniors Money also has deep experience and track record.

How does the sales process work? 

Spry Finance continues to follow our tried and trusted model whereby 100% of potential applicants, irrespective of whether we generated the lead ourselves or it was referred to us by a broker, are required to undergo a consultation process with one of our Client Consultants.  In addition to comprehensive information being provided to the client, the process gets to the bottom of what the client’s personal and financial circumstances are and whether or not a lifetime loan is a suitable solution for them.  

It is not in our interest to lend to people who do not fully understand how a lifetime loan works or for whom a lifetime loan is just not suitable.  Spry will routinely advise clients that a lifetime loan is not suitable for them, if that is the case.  Where it is established that the loan is suitable, Spry will assist the client in preparing their application and submitting it to Seniors Money.  Seniors Money then takes care of processing the application, making a credit decision and creating the new loan.

Has the COVID-19 pandemic impacted upon the company’s ability to reach new customers and, if so, how is the business adapting to new ways of working?

The Spry consultation process ordinarily includes a number of face to face meetings with clients.  In Ireland these meetings customarily take place in the client’s own home.  Clearly our ability to conduct such consultations is impacted by COVID-19 lockdown restrictions.  

Like many other businesses we have developed new ways to do business.  A lot of the preliminary interaction with clients is now done over the phone and via email.  Where face to face meetings are permissible they are conducted under social distancing rules, including the use of face masks and table-top acrylic screens.  We’ve also equipped the Consultants with external screens for their laptops which can be turned to face the clients from a distance, and documents are provided and signed electronically, further reducing or eliminating physical paperwork. Where physical meetings are not allowed or feasible, we can conduct much of the consultation via video conference, although we still insist on at least one substantive face to face meeting before an application can be accepted and this has necessarily slowed down the progress of some cases through the pipeline as we await a re-opening of lockdown restrictions.  We don’t think it is something that can be compromised on though, to ensure that we have the best possible understanding of each end every client.

How would you describe the appetite for equity release in Ireland currently? Do you see evidence of a pent-up demand, since the product was not available for a number of years?

We’ve long been aware that there is an ever-present appetite for equity release in Ireland.  Even before we launched we had built a significant pipeline of unsolicited leads from prospective clients who had joined our waiting list on our website.

The number of Irish people aged 60 or older has increased by over 50% since Seniors Money first entered the market back in 2006, and these people are more active and feeling younger at heart than ever before – arguably therefore having an even greater desire than their predecessors to maintain a certain level of lifestyle in retirement.  Unfortunately, adequate pension planning and provision has not improved much in that period for many of this new and growing cohort of over 60s who now face the same classic issue of being asset rich but cash poor.

We certainly saw evidence of pent-up demand both before and after our re-opening, which translates directly into a healthy flow of leads. However, we think the demand we are experiencing would be even greater if it were not for the COVID-19 backdrop.  It’s difficult to quantify but it’s extremely likely that many people who would otherwise already be applying to us are instead temporarily holding back until the wider outlook is more certain and they can actually put the funds to the required use.  For example, the most common loan usage has always been ‘home improvements’ and this simply can’t be done when the construction sector is still in lockdown.

What opportunities do you see for new funders and investors to enter the Irish market?

The Irish market will definitely see more participants. It is likely this will be a mix of Irish financial institutions as well as overseas parties. The market is attractive to investors given the demographics and that much of the legal and regulatory systems mirror that of the UK. The only limiting factor is size, with the addressable market being less than 10% of the UK.

SMI would welcome new market entrants. In the markets we have operated in, it has been our experience that more players is a positive dynamic which enlarges the market to the benefit of all.  In the meantime, we believe that Spry Finance and Seniors Money themselves offer an attractive opportunity to new funders who would like to invest in Irish lifetime loan assets.  We are a ready-made, experienced end-to-end platform to safely originate and manage these assets.

How do you assess prospects for growth in the equity release market in Ireland for the year to come?

We are very positive on the prospects for growth in Irish equity release market in the medium term. As I mentioned earlier, the Irish population is ageing and we see equity release as an increasing element of retirement planning going forward. Looking forward to 2022, we see further growth in demand for equity release as the Irish economy fully reopens following Covid-19. We expect to see increasing numbers of our client base exploring the equity release product to see what opportunities the product can offer them.    

Paul Turner, Managing Director Retail at Just Group in the UK, shares his views on the social care debate, and suggests that helping people look ahead to later life with confidence rather than trepidation requires a bold vision of a better future.

 

The recent report from the Equity Release Council is a reminder that there are very real consequences to successive governments’ dithering over social care reforms.

Harrowing reports of the effect of the Covid-19 pandemic on care homes is obviously fresh in our minds but the truth is that years of government inaction has undermined enthusiasm for people to start thinking about or planning for their own potential care needs.

Even before the pandemic most people would prefer to stay living in their own homes if they needed later life care, but this recent research highlights that 60% of over-50s said they were ‘fearful’ about moving into a care home.

This desire to stay at home in later life is a key theme that has emerged repeatedly in the research we have conducted for our annual Just Group Care Report, which has been tracking the attitudes and understanding of over-45s towards the social care sector since 2012.

People consistently say they are interested in the care debate. But they are also confused about their rights and responsibilities and split on how care funding should be divided between State and individual.

Those who have experienced organising care for loved ones find it an onerous undertaking. Our 2020 report found four in five (78% found the system complex and hard to navigate, three-quarters (77%) found the process stressful, and nearly nine in 10 (88%) were shocked at how expensive care is.

People prefer not to think about or discuss the issue of care. We found four in five people over-45s have not thought about care or spoken to family or friends about it. Only a tiny minority have made plans or say they have saved money to fund it.

Helping people look ahead to later life with confidence rather than trepidation requires a bold vision of a better future. That requires a forward-thinking government prepared to act on its convictions and to be straight with the public about future care standards and costs.

The absence of clear policy or intention means it’s difficult for people to make plans for their own future. Unfortunately, this is exacerbated by frequent announcements about ‘fixing’ social care – creating a sense of impending change that never seems to bear fruit. 

A more candid conversation is required to engage the public. And that honesty needs to extend to one of the most emotive issues – whether people should have to use the wealth in their homes to pay for care.

Political promises to ‘protect the family home’ must be set against the cost of social care and the trillions of pounds tied up in pensioner homes. And this must be balanced against people’s increasing resolve to stay in their own homes for longer and the rising expectations around the standard of care they want.  

Covid-19 has thrown a massive spanner into the economic workings of this country and hit the care sector hard indeed. The big question going forward is whether that will be a catalyst for change towards a care system fit for the 21st Century or just another excuse to kick the can further down the road.

https://www.justgroupplc.co.uk/~/media/Files/J/JRMS-IR/news-doc/2020/just-care-report-final.pdf

https://www.equityreleasecouncil.com/wp-content/uploads/2021/02/Care-Report-Equity-Release-Council.pdf

#SocialCareReform #ERCCareReport #EquityReleaseCouncil #CareFunding

Robert Majkowski, CEO of Fundusz Hipoteczny DOM S.A. which is the largest home reversion provider in Poland, explains that while the local equity release market is still in its nascent stage of development, there are huge opportunities in the country based on its ageing population, the high level of homeownership among senior citizens and the low level of pensions. 

As a leading player in the home reversion market, how would you describe the current market for equity release in Poland?

The professional equity release market has been developing in Poland since 2008. For many decades, a popular solution in our country has been the conclusion of life estate contracts between natural persons. Under such an agreement, in return for the transfer of the right to the property, the beneficiary retained the right to housing and at the same time had to receive a benefit in kind. Over time, this solution has evolved towards cash benefits. More than 10,000 contracts of this type are still concluded annually. The P2P (person to person) market carries a number of threats to senior citizens, and the development of professional solutions offered by financial institutions increased the security of the service for all stakeholders. The industry code of conduct has been in place since 2012. 

Currently, only home reversion solutions are available in our country, despite the fact that a specific law allowing banks to offer a lifetime mortgage already entered into force back in 2014. Despite the enormous potential, which is very well illustrated by 90% of the silver population in Poland being homeowners and a very low level of pensions, the equity release market is still in the nascent stage of development.

In the light of the COVID-19 pandemic, how have equity release providers in Poland been adapting their practices? What are some of the challenges? Have you been able to take the business online?

Poland is a country with quite advanced digitization of the economy, and Polish senior citizens are increasingly using the Internet and new technologies. More than half of Poles aged 60+ use electronic banking, which represents great progress in recent years. Our industry is very active in the field of Internet marketing activities. Educational portals for senior citizens and social networking sites dedicated to this group are very popular and extremely effective marketing tools. Since the outbreak of the COVID-19 pandemic, in addition to implementing sanitary procedures in relation to personal contacts, we have also launched an online chat function and a video chat. However, for our customers, a phone call that ends with a physical meeting is the preferred and most popular model. Due to legal restrictions, we cannot conclude contracts online unfortunately.

How would you characterise the regulatory framework for equity release in Poland? Do you see active interest from policy makers in growing the market?

Currently, the home reversion market operates on the basis of the general provisions of the Civil Code. Professional entities must also adhere to industry principles of good practice. Since 2012, the Ombudsman and the Office of Consumer Protection have been calling for increased protection of consumers using the solution. As from 2013, together with the Ministry of Economy and Polish parliamentarians, we started the process of regulating the market, which in 2015, further to extensive public consultations, resulted in the creation of a very well-rated draft “Act on lifetime cash benefit”, which was to regulate home reversion schemes. 

At the same time, between 2009 and 2014, work was carried out on the Act to introduce the lifetime mortgage into the Polish banking system, which ended with its adoption. Unfortunately, this provision remains a “dead” law to this day, in the sense that it has never been used. In our opinion, according to the assessment of the Ombudsman and the Office of Consumer Protection, in order to ensure the safety of customers and the development of the market, it would be better to adopt appropriate, ready-made regulations. Nevertheless, for over a decade, the professional market, unlike the P2P market, has been able to avoid any scandals or reputational problems. Current customers, in all surveys undertaken, have confirmed above-average satisfaction with the home reversion service.

How do you see the level of interest in equity release in Poland among the media and the public?

Media interest in the equity release service has fluctuated over time. Over the years 2013 to 2014, when work on the regulations was underway, journalists showed great interest. However, this interest has decreased over time. However, currently, due to the increasing difficulties and inefficiency of the pension system in Poland, the topic is attracting increasing attention. Equity release is beginning to be seen as one of the puzzle pieces of a modern and comprehensive pension system.

What opportunities do you see for new funders and investors to enter the Polish market?

Poland is a country with great opportunities and potential. From 1992 until the outbreak of the pandemic, Polish GDP grew continuously and dynamically. Despite this increase in comparison to the so-called countries of the old EU, there is still visible inequality and a lack of full convergence. A very stable real estate market, with 90% of the silver population in Poland owning the houses in which they live , a very low level of pensions and the ageing society in a country of 38 million population is a huge opportunity.

Claudio Pacella, CEO of 65Plus in Italy and EPPARG Board Member, was interviewed by WeWealth in Italy as part of a feature on lifetime mortgages, described as the ‘mortgage loan that turns the house into cash’.

 

Claudio explained that in general there are three reasons why people decide to take out a lifetime mortgage: an actual need for money, the fact of not wanting to give up the standard of living that they had become accustomed to and – increasingly – the desire to help their children to avail of immediate funds. He noted there are currently four credit institutions in Italy which grant lifetime mortgages: Mps (the only bank on the market since 2007), Intesa Sanpaolo, Imprebanca and Banca Popolare di Sondrio. 

 

Furthermore, Claudio noted that the average age of those taking out lifetime mortgages is 74 years, while the average amount paid is around EUR 90-95,000, equal to about one third of the value of the mortgaged property. He highlighted that rates move in a range between 3.5 and 5.25%, which is much lower than a few years ago, when they had reached the peaks of 7-8% in 2010-2011. Asked how much money would need to be reimbursed at the expiry of the loan, Claudio commented that the capital doubles in 15 years at a rate of 5%, and in 18 years, at a rate of 4%, so assuming someone takes out a lifetime mortgage in 2020, of EUR 100,000 you will return EUR 200,000 in 2035, or in 2038. He commented that the lifetime mortgage is a poorly developed instrument, but it has significant margins for growth. He concluded that in Italy, currently, while the lifetime mortgage market is today limited (few hundred million euros), the actual potential is around EUR 2 billion delivered per year, equal to 0.1% of GDP, and could be quickly achieved.

 

The full interview in Italian is available here.

 

Kategoria nowości: INTERNAL NEWS

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<>
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The European Pensions and Property Asset Release Group (EPPARG) and EY published the third edition of its Global Equity Release Survey report on 17 June 2025. The report predicts sustained growth over the next 10 years, despite economic headwinds, with the market more than doubling in size.
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<>
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Equity Release: Global market on track to hit $56 billion by 2035
The European Pensions and Property Asset Release Group (EPPARG) and EY published the third edition of its Global Equity Release Survey report on 17 June 2025. The report predicts sustained growth over the next 10 years, despite economic headwinds, with the market more than doubling in size.
May 28, 2025
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The European Parliament’s Culture and Education Committee hosted a confirmation hearing with Mr Glenn Micallef, European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, on 4 November 2024. Mr Glenn Micallef shared his views with MEPs on intergenerational fairness, protecting young people and supporting the creative sector, among other topics.
<>
Jun 17, 2025
Equity Release: Global market on track to hit $56 billion by 2035
The European Pensions and Property Asset Release Group (EPPARG) and EY published the third edition of its Global Equity Release Survey report on 17 June 2025. The report predicts sustained growth over the next 10 years, despite economic headwinds, with the market more than doubling in size.
May 28, 2025
EPPARG navigates global opportunities and challenges at the Later Life Lending Summit
As part of the 2025 Later Life Lending Summit, the European Pensions and Property Asset Release Group (EPPARG) held a panel discussion which took a deep dive into the changing equity release landscape at global level, drawing on the findings of its latest global survey.
Nov 10, 2024
European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, Glenn Micallef: “1 in 2 young people born today will live to 100 years of age”
The European Parliament’s Culture and Education Committee hosted a confirmation hearing with Mr Glenn Micallef, European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, on 4 November 2024. Mr Glenn Micallef shared his views with MEPs on intergenerational fairness, protecting young people and supporting the creative sector, among other topics.
<>
Jun 17, 2025
Equity Release: Global market on track to hit $56 billion by 2035
The European Pensions and Property Asset Release Group (EPPARG) and EY published the third edition of its Global Equity Release Survey report on 17 June 2025. The report predicts sustained growth over the next 10 years, despite economic headwinds, with the market more than doubling in size.
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EPPARG navigates global opportunities and challenges at the Later Life Lending Summit
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Nov 10, 2024
European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, Glenn Micallef: “1 in 2 young people born today will live to 100 years of age”
The European Parliament’s Culture and Education Committee hosted a confirmation hearing with Mr Glenn Micallef, European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, on 4 November 2024. Mr Glenn Micallef shared his views with MEPs on intergenerational fairness, protecting young people and supporting the creative sector, among other topics.
<>
Jun 17, 2025
Equity Release: Global market on track to hit $56 billion by 2035
The European Pensions and Property Asset Release Group (EPPARG) and EY published the third edition of its Global Equity Release Survey report on 17 June 2025. The report predicts sustained growth over the next 10 years, despite economic headwinds, with the market more than doubling in size.
May 28, 2025
EPPARG navigates global opportunities and challenges at the Later Life Lending Summit
As part of the 2025 Later Life Lending Summit, the European Pensions and Property Asset Release Group (EPPARG) held a panel discussion which took a deep dive into the changing equity release landscape at global level, drawing on the findings of its latest global survey.
Nov 10, 2024
European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, Glenn Micallef: “1 in 2 young people born today will live to 100 years of age”
The European Parliament’s Culture and Education Committee hosted a confirmation hearing with Mr Glenn Micallef, European Commissioner-designate for Intergenerational Fairness, Youth, Culture and Sport, on 4 November 2024. Mr Glenn Micallef shared his views with MEPs on intergenerational fairness, protecting young people and supporting the creative sector, among other topics.

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