1. Growing your equity release network
Introductory slide – this can be deleted by advisers
Growing your equity release network
Presentation template 1: for use with financial advisers not qualified in equity release Here you’ll find a presentation template aimed at financial advisers not qualified in equity release as we have discussed in ‘Growing your equity release network: Your quick guide to successful referrals’. This template is designed for use in one-to-one meetings with potential referral partners. You can use these as a base for your own presentation, changing it to fit your own brand and tone of voice. When you meet with potential referrals partners, you may also like to use the customer profile brochure. This will help to explain the types of customers they may encounter.
Please note that it is your responsibility to ensure that your communications are compliant.
Aviva cannot accept liability for any loss which could arise from the information shown in the following pages.
For financial advisers only. Not approved for use with customers.

2. Equity release referrals
Slide 1 (Mandatory)
Equity release referrals
<Insert adviser name> <Insert company name> The content of this presentation should not be construed as legally binding on [ name of Adviser firm ] and we do not give any warranties as to the accuracy of the information
For financial advisers only. Not approved for use with customers.

3. Equity release referrals
Slide 2 (Mandatory)
Equity release referrals
Name: <insert name> Qualifications: <insert qualifications> Qualified to advise on equity release solutions through the <insert as appropriate Chartered Insurance Institute (CII) /the Institute of Financial Services (IFS)>.
Role: <insert job title>
Contact details: <insert address / phone number>
 Company name: <insert company name>
Company Address: <insert company address>
Company information: <insert brief summary of adviser firm’s expertise>
<Hello and welcome. I’m < as above> >
I am pleased to be here today because I am currently developing a referral network in equity release.
I am qualified to advise on equity release solutions through the <insert Chartered Insurance Institute (CII) /the Institute of Financial Services (IFS)>.
<So let’s start with the basics.>
Equity release is a way for homeowners to receive a cash payment from their home without having to sell it and move out, that is repaid when they die or go into long term care.
Equity is the value in a property that represents the current market value, minus any outstanding mortgage payments.
Please note: equity release is a long term financial commitment which will last until death or until permanently leave the property for long term care. There can be substantial early repayment charges for ending the agreement early.

4. What are the reasons for choosing equity release?
Slide 3 (Optional)
What are the reasons for choosing equity release?
31%
Short term debt (1)
24%
outstanding mortgage (1)
61%
Home improvements (1)
16%
Regular bills (1)
UK Population 2024
26%
Over 60 years old(1)
Millennials’ attitudes towards property (2)
61%
My home is my number one financial priority (2)
35%
My generation has been priced out the property market (2)
To start, here are a few statistics with particular relevance to equity release.
Some people are using equity release to clear short term debts. 31% of people are repaying short term debts, with 24% using equity release to pay off an outstanding mortgage.
Equity release could be a viable option for some older borrowers who may have capital to repay on their interest-only mortgages.
In 2015 home improvements (61%) was the most common reason for taking out equity release. And research shows that 16% of people were taking out equity release to help them meet the cost of regular bills.
By 2024, 26% of the population will be over 60. As people continue to live longer, making funds stretch further could become increasingly difficult.
This could result in equity release becoming an essential part of everyday retirement planning.
Then we consider the next generation.
These are often young people in good jobs who find it impossible to get on the housing ladder. As we will see, equity release has the potential to help them.
(1) Mintel – Equity Release Schemes UK, May 2016 report (2) Aviva Family Finances Report, Summer 2016

5. Equity release: market overview
Slide 4 (Optional)
Equity release: market overview
Market value: 25 years of UK home ownership (3)
The result
‘69% of homeowners over 45 say their property is worth more than their pensions, savings and investments combined’ (4)
Location
Then (Q4/1991)
Now (Q1/2017)
Growth
UK average
£53,635
£206,665
285%
London average
£75,322
£478,782
536%
Market drivers 
Mortgage availability (high loan to value ratios)
Low interest rate environment (post financial crisis)
Low level of housing supply creates demand
<Let’s take a step back and briefly examine the source of this huge explosion of UK household wealth.>
Looking back over the past 25 years, the average UK residential property’s market value has increased by 285%. For London, the increase was 536%.
There were several reasons for this: mortgages were readily available with high loan-to-value ratios (95% to 100%). We’ve also had a low interest rate environment since the financial crisis. There is also the basic economic law of supply and demand. The low supply of housing also boosted house prices.
So it is little surprise that around 7 in 10 homeowners over 45 say that their home’s market value is worth more than their pensions and other investments put together.
To provide some balance, it’s not always plain sailing.
In the third quarter of 1989 UK property prices peaked, then fell, and took until 1997 to get back to where they were. That’s an eight year slump.
(3) Nationwide index (All UK Properties) (4) Aviva Real Retirement Report, Summer 2016

6. Lifetime mortgages: product overview
Slide 5 (Mandatory)
Lifetime mortgages: product overview
Lifetime Mortgages:
Typically come in the form of a ‘lump sum’ or ‘drawdown facility’
In both forms, a loan is secured on the property, after which interest is added annually on a compound basis
The following product features will normally apply to all lifetime mortgage schemes:
No loan repayments are required until the client dies or goes into long term care
Optional inheritance guarantee
No negative equity guarantee
Option to make voluntary repayments
Interest rates are fixed or capped
<What does an equity release plan look like?>
Lifetime mortgages are the most common form of Equity Release.
Home reversion plans are also available where the customer sells part or all of the property to a provider. We’re focussing on lifetime mortgages as these make up the majority of the market.
With a lifetime mortgage, the amount a client may be able to borrow depends on their age, residential status, the value of the property, along with a range of other variable factors. Unlike a regular mortgage, clients can choose whether or not they make repayments and interest is added to the loan.
Usually, common features shared by lifetime mortgages include:
Loan is repaid once the client dies or goes into long term care.
Optional inheritance guarantees ensure that an inheritance is left for next of kin.
Negative equity guarantees, which ensure that the clients’ estate will never pay back more than the eventual sale price of the property.
Equity released from the property is paid tax free.
Clients may be able to choose whether or not they make repayments.
When interest is charged it is calculated on the amount borrowed and the interest already added, which quickly increases the amount owed.
Please note - not all providers offer all types of equity release and products vary between providers

7. Lifetime mortgages: product overview
Slide 6 (Mandatory)
Lifetime mortgages: product overview
The drawdown product is the more popular type of Lifetime mortgage(5):
Lump sum
Releases a one-off lump sum
May allow clients to borrow more initially than a drawdown product
Interest is charged on the full amount borrowed from the outset.
Drawdown
Releases a smaller initial lump sum
Allows access to further releases in the future by setting up a cash reserve
Interest is only charged as each amount is released
Key considerations
Lifetime mortgages are only available to homeowners over 55 and minimum property values apply
May affect clients' tax position and eligibility for means tested benefits
Reduces inheritance available for beneficiaries, which can reduce to nothing
Substantial penalties for ending the lifetime mortgage early
Costs to set up the scheme
May affect ability to move home or may be unable to release more equity in the future.
Drawdown lifetime mortgages tend to be the most popular type of equity release product, accounting for 65% of products chosen in 2016
Lump Sum products:
The client receives a lump sum tax-free, which could be used for one-off payments such as clearing small outstanding mortgages, other debts or funding home improvements.
The clients will be able to borrow more initially
Releases a single lump sum
Interest is charged on the full amount borrowed from the outset
Drawdown products:
Flexible option lifetime mortgages provide clients with the option to release property wealth in instalments and can help meet smaller costs or boost retirement income over the longer term.  
Releases an initial sum, allowing clients to release further amounts in the future with a cash reserve.
Interest is charged as each amount is released
Key Considerations
Equity release may affect a clients’ tax position and eligibility for means tested benefits.
Releasing the equity from property reduces available inheritance for beneficiaries, which can reduce to nothing.
Equity release is a long term commitment, as it may not be possible to borrow more or move home, and there are early repayment charges, which can be substantial.
It’s restricted to people over 55. The loan secured on the property is repaid when the person dies or goes into long-term care.
Costs include arrangement charges, valuation costs, legal and adviser fees
(5) Equity Release Council Market Report, Spring 2017

8. Equity release and your clients: Lifetime mortgages
Slide 7 (Optional)
Equity release and your clients: Lifetime mortgages
UK homeowners over the age of 55
No mortgage or only a small mortgage to repay from the proceeds of the loan
The amount the customer is able to borrow depends on the value and type of property, and other factors including their individual circumstances.
The actual LTV will depend on the customer’s personal circumstances. With a lifetime mortgage, the amount a client may be able to borrow depends on their age, residential status and the value of the property, along with a range of other variable factors.
Typical loan to value
Age 65
Age 75
Couple
Around 29%
Around 40%
Single
Around 30%
Around 41%

9. Lifetime mortgages: examples
Slide 8 (Optional) Equity release referrals
Lifetime mortgages: examples
Upsizing
Divorced client buys house outside of price bracket.
Intergenerational lending
 Parent/grandparent helps younger family member or first time buyer get on the property ladder.
Downsizing
Client reaches retirement, downsizes home, discovers financial shortfall.
Later life
Client needs finance for home adaptation in later life.

10. Equity release: client safety and protection
Slide 9 (Mandatory)
Equity release: client safety and protection
Equity Release Council – aims
To ensure products are safe and accessible for consumers.
Works with regulators, government and industry to promote the sector and its role in supporting an ageing population.
Equity Release Council – members and standards
Members include equity release providers such as Aviva.
Standards Board ensures products are safe and reliable for consumers.
Members offer products which conform to best practices.
95% of all UK equity release lending is from Equity Release Council members(6)
The Equity Release Council was founded in 1991 as ‘Safe Home Income Plans
So it has 25 years under its belt.
It was created to promote safe equity release schemes and to safeguard the interests of homeowners.
The Council works with regulators, government and industry to promote the sector and its role in supporting an ageing population.
Members include equity release providers such as Aviva.
The Council has a Standards Board which exists to ensure that equity release products are safe and reliable for consumers. It sets the standards and principles for its members.
Through this board, members aim to offer products and services which conform to the best practices of the sector, ensuring customers are fully informed and increasingly protected.
(6) Equity Release Council, November 2016, Equity release lending increases by more than a quarter in Q3

11. Alternatives to equity release
Slide 10 (Mandatory)
Independent advice 1.
Client’s personal situation
Tax position
Family/beneficiaries
Will
Independent legal adviser
Estate planning (Inheritance Tax)
Health/life expectancy 2.
Alternatives to equity release
Downsizing
Local authority grants
Savings and pension income
Financial assistance from family member(s)
State benefits 3.
Product solution
Balanced overview of all options
Overview of equity release products
Understands the features, risks and benefits of the suitable product
Recommends the most appropriate solution based on the individual’s personal circumstances.
Independent advice is a regulatory requirement for equity release. This is not an ‘off the peg’ solution.
In addition to their regulatory responsibilities, adviser members of the Equity Release Council must follow strict guidelines – the Statement of Principles – as part of the advice process.
As you can see here, selecting the appropriate product is the very last stage of the process
Here’s a summary of some of the key areas.
I would consider the client’s tax position and ensure that the client speaks to their family and any other beneficiaries, as it will reduce any inheritance, and will advise my client that they need to consult an independent legal adviser.
I would outline the impact on their will and estate planning and how any released funds may impact on their ability to fund long-term care.
I would also discuss the customer’s health and life expectancy and take into account the effect of positive and negative changes in house values, that this is a long term commitment and that there can be substantial early repayment charges.
I would discuss alternatives to equity release including: downsizing; local authority grants; savings; pension income and financial assistance from any family member, as this is a long term commitment which could impact their ability to move home or release more equity. I will establish or refer for investigation the customer’s eligibility for state benefits and the effect equity release has on them.
I will give a balanced overview of the pros and cons of both lifetime mortgages and home reversion plans. I will ensure that the client clearly understands the features, risks and benefits, as well as the costs of setting up the plan including legal fees and cost of advice of the product recommended.

12. Equity release opportunities
Slide 11 (Optional)
Equity release opportunities
Baby boomers
Approaching retirement
Asset rich
Home owners
Longer lives
% UK population over 60 (1)
Need to make money stretch further
Debtors
31% repay short term debt (1)
22% pay off outstanding mortgage (1)
Home improvers
Equity release for home improvements - 61% in 2015(1)
Baby boomers
Now reaching retirement, many baby boomers are asset rich, likely to own their own home and could be in need of the additional financial flexibility equity release can bring.
Longer lives
By % of the population will be over 60. As people continue to live longer, making funds stretch further could be increasingly difficult.
Debtors
31% of people use Equity Release to repay short term debt and 22% to pay off an outstanding mortgage.
Equity release could be a viable option for some older borrowers who may have capital to repay on their interest-only mortgages
With a lifetime mortgage there will still be a loan secured on the property.
Home improvers
In 2015 home improvements (61%) was the most common reason for taking out equity release.
(1) Mintel - Equity Release Schemes UK, May 2016 report

13. Potential clients for a lifetime mortgage
Slide 12 (Optional)
Potential clients for a lifetime mortgage
Equity release referrals Mick and Anita Issue: Limited Savings Need: Intergenerational Wealth Transfer
Mick, 67 and Anita, 65, both retired. 
Home worth £350,000, modest occupational pensions and state pensions. The tax-free cash which they took out of their pension plans when they retired has gone. 
They would like to help their eldest grandchild onto the property ladder as she is finding it difficult to save for a house deposit on her current salary
They have savings tied up in long-term investments which after speaking to their financial adviser, the recommendation is to leave them in place
Potential solution
After taking financial advice they opt for a lump sum product as they know they won’t need any further cash in the future.
The decide to not take the full lump sum available to them, but take a smaller amount of £35,000 to help their grandchild pay for a deposit and to furnish the house

14. Potential clients for a lifetime mortgage
Slide 13 (Optional)
Potential clients for a lifetime mortgage
Equity release referrals Jane Issue: Medical condition Need: Time with family
Jane is 73 and is receiving treatment for a heart condition.
Her home is worth £150,000 and she now has state pension to rely on.
She wants to spend more time with her children and grandchildren who live in different parts of the country.
Potential solution
Jane releases equity from her home in a lump sum lifetime mortgage
Her medical condition means she can borrow a higher percentage of her property’s value (loan to value) or get a lower interest rate than she would be able to otherwise.
Jane doesn’t need the full lump sum available to her so she chooses to take £30,000 which is enough to help travel to spend time with her family.

15. Potential clients for lifetime mortgage
Slide 14 (Optional)
Potential clients for lifetime mortgage
Equity release referrals Donald Issue: Declining health Need: Home adaptations
Donald is 71. After his wife’s death, he lives alone in his home which is worth £300,000. 
He has no children. He has a small private pension and recently had surgery to his spine which has resulted in him being in a wheelchair
He would like to stay in his own home but to do so, he would need to make some home adaptations
Potential solution
Donald releases money tied up in his home to install a ramp at the front door and to convert a downstairs room into a wet room
He initially borrows £40,000 on a flexible option basis to make the planned home adaptations and leaves rest in reserve in case he needs some more money in the future
Donald won’t be charged any interest on the money in reserve until he takes it.

16. Potential clients for a lifetime mortgage
Slide 15 (Optional)
Potential clients for a lifetime mortgage
Equity release referrals Louise Issue: Income gap Need: Supplementing income and leaving an inheritance
Recently widowed, Louise, 60, enjoys an income from her husband’s company pension but won’t receive her state pension until she’s 66.
She is struggling with daily living costs but also wants to leave her children some form of an inheritance.
Louise’s home in Surrey is valued at £400,000 and her mortgage is paid off.
Potential solution
She opts for a flexible option lifetime mortgage and releases an initial lump sum of £25,000 and leaves the rest in a reserve
Louise has around £30,000 left in her reserve that she can draw from in order to top up her income throughout her retirement
She opts to include an inheritance guarantee so that she can leave something to her children

17. Potential clients for a lifetime mortgage
Slide 16 (Optional)
Potential clients for a lifetime mortgage
Equity release referrals
Martin
Issue: Limited savings
Need: Essential home improvements 
Martin is 75. He lives alone in Derbyshire and his house is worth £350,000.
His wife recently passed away and is finding it difficult to manage his finances with his small state pension being his main source of income.
He has considered downsizing but Martin has made some good friends in the neighbourhood he lives in. He doesn’t have any family or grandchildren so would find it difficult moving from the area that he has always lived in.
Potential Solution:
Martin speaks to a financial adviser and chooses to take out a flexible option lifetime mortgage.
He chooses to take an initial lump sum of £70,000 to help with general day to day finances but also to fit in new windows.
He still has £56,000 left which he doesn’t need right now so keeps it in the reserve.
Martin will not be charged interest for the money left in the reserve until he takes it. He can choose to take as little as £2,000 as and when he needs it.

18. Why referrals? Equity release referrals
Slide 17 (Optional)
Why referrals?
Equity release referrals
You already have direct access to clients over 55, who are planning for retirement and could benefit from equity release.
Maintain client cases that may be otherwise lost.
Help promote client wellbeing and financial stability.
Establish your reputation for helping clients in later life.
Enjoy a fee for your role as referral partner.

19. Adviser company name and registered company address
Slide 18 (Mandatory)
Adviser company name and registered company address