Market Stats & Potential

So why do people release equity? Source: LV=

Current trends Supporting family is a growing category:  School/university fees  House deposits  Weddings  Divorce settlements Source: LV=

Current trends The ‘luxury purchase’ is showing signs of recovery:  Purchase of holiday home/caravan/motorhome  Property development  Financing business ventures  Extended holidays Source: LV=

Unusual cases And some of our more unusual cases…  Face lift  Cosmetic dentistry  Solar panels  Charity rally driving trip Source: LV=

Case study – property purchase  Pension not enough to cover regular bills  Still working part-time  Had a fall – unable to maintain property  Retirement development – great location and support package available  Needed cash to make up shortfall in purchase price  Simultaneous purchase and release of equity

Case study – delaying moving home  Properties in UK and Portugal  Income from overseas property reduced  Cost of UK healthcare insurance increased, value of shares decreased  Unwilling to sell either property at a loss  Cash released has paid healthcare premiums and offset loss of income from overseas property

Case study – helping grandchildren  Inherited property – needed external and internal works  Wished to contribute towards grandson’s school fees  Took a larger initial sum to pay for work to property  Releases smaller tranches to pay each term’s fees

How has this market performed? YearVolume of plans sold Value of plans sold (£m)* ,3921, ,7721, ,2931, ,2241, , , , Key points: Peak in volume and value 2007 Followed by mortgage ‘crash’ of introduction of drawdown arrangements 2011 – total value of plans is down slightly over 2010, but the final two quarters showed a strong recovery. In fact, the Q4 performance was the strongest for two years The green shoots of recovery? * Assumes house prices remains static Figures from Mintel Equity Release Report, May 2011 and SHIP press release January 2012

And the future? Key points SHIP, lenders and advisers alike are working very hard to raise profile of equity release Increasing recognition that ER needs to be one of the cornerstones of retirement planning We believe the future is bright for equity release * Assumes house prices remains static Figures from Mintel Equity Release Report, May 2011 Note that the 2011 figure used here was Mintel’s estimate only and they have used this to project forward to figures were lower than estimated YearVolume of plans sold Value of plans sold (£m) * Percentage change (value of plans) ,3921, ,7721, ,2931, ,2241, , , , , % ,7441,062+8% ,7011,131+6% ,3221,152+2%

Future market potential So, why do we think the future is bright?  UK population will continue to expand and age, putting further pressure on public funds  Lower than expected investment returns  Low pension participation and falling annuity rates  Rising cost of care  Longer life expectancy  Property prices can generally be relied on to grow over the long term

The market has changed There is no longer a single market for equity release ‘but rather several markets, defined by different customer, product and advice needs’ Six main customer types:  55+ with long term care needs (ineligible for state-funded care)  Vulnerable low-income older homeowners with debts (‘last resort’ cases)  Low-income older homeowners struggling to make ends meet  Newly retired with adequate income and high lifestyle expectations  Approaching/in retirement and financially comfortable (‘aspirational’ cases)  High income, high asset base looking to mitigate tax liability Source – SHIP & Mintel Equity Release Report, May 2011.

Product innovation Innovation essential to stimulate market recovery  Focus on ERCs  Inheritance protection  Interest repayments  Flexible drawdown options  Additional guarantees  Impaired lives  Reduced minimum ages  Mix and match

Intermediaries play a vital role Source – SHIP (Mintel Equity Release Report May 2011 and SHIP 2011 year-end figures)

Any questions?

About LV= For financial adviser use only. Not to be used after 5 April 2012 LV Equity Release Limited, Keynes House, Tilehouse Street, Hitchin, Herts, SG5 2DX. LV= is a registered trade mark of Liverpool Victoria Friendly Society Limited and a trading style of the Liverpool Victoria group of Companies. LV Equity Release Limited is registered in England (No ) and is authorised and regulated by the Financial Services Authority (register number ). Registered address: County Gates, Bournemouth, BH1 2NF. Tel: /12

About LV= For financial adviser use only. Not to be used after 5 April 2012 LV Equity Release Limited, Keynes House, Tilehouse Street, Hitchin, Herts, SG5 2DX. LV= is a registered trade mark of Liverpool Victoria Friendly Society Limited and a trading style of the Liverpool Victoria group of Companies. LV Equity Release Limited is registered in England (No ) and is authorised and regulated by the Financial Services Authority (register number ). Registered address: County Gates, Bournemouth, BH1 2NF. Tel: /12

About LV= For financial adviser use only. Not to be used after 31 July 2012 LV Equity Release Limited, Keynes House, Tilehouse Street, Hitchin, Herts, SG5 2DX. LV= is a registered trade mark of Liverpool Victoria Friendly Society Limited and a trading style of the Liverpool Victoria group of Companies. LV Equity Release Limited is registered in England (No ) and is authorised and regulated by the Financial Services Authority (register number ). Registered address: County Gates, Bournemouth, BH1 2NF. Tel: /12