Governance Financial Statements
Strategic Report
13
The fundamental drivers of growth remain intact, and are: • households wanting to top up their retirement income to improve their, or their family’s standard of living in later life; • people with outstanding mortgages who are entering retirement and require a solution to settle the debt with the existing mortgage company; • strong demographic growth. The number of people aged 65 and over is forecast to increase from around 13 million today to around 17 million by 2040 (source: ONS); and • homeowners aged over 55 are estimated to own property wealth of over £3.5tn (source: ONS). We estimate that the existing industry loan book including interest is around £48bn. Just Group introduced medical underwriting into a niche segment of the lifetime mortgage market some years ago and in 2021 extended it across the Just for You mortgage range. We estimate by collecting medical information and lifestyle factors from applicants, we are able to provide six-in-ten a lower interest rate, or for those who need it, a higher borrowing amount. This market disruption has positively changed how lifetime mortgages are advised. LONG-TERM CARE SOLUTIONS Care Plans, or immediate needs annuities, are a form of purchased life annuity. In exchange for an up-front premium, they provide a guaranteed income for the life of the insured to help contribute to the cost of their care. Under current rules this income is tax free when paid directly to a registered care provider, with Care Plans available both to individuals entering care facilities and receiving domiciliary support. As such, Care Plans provide a form of longevity insurance to an individual against the ongoing costs of receiving care until their death. In January 2025, the government announced their intention to launch an independent commission to reform adult social care. The taskforce, to be led by the cross-bench peer Louise Casey, will be charged with developing plans for a new national care service, a Labour election manifesto pledge, in the biggest shake-up to social care in England in decades. The final report is not expected until 2028.
EXTERNAL GIFL MARKET (£M)
0 1,000 2,000 3,000 4,000 6,000 5,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Source: Just analysis, ABI
LIFETIME MORTGAGE MARKET SIZE AND GROWTH RATE (£M)
2024 2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
CURRENT MARKET AND OUTLOOK The drivers of the need for care are strong because:
2012
• there are currently around 1.7 million people aged 85 or over in the UK – this is the average age at which people go into care homes; • this is the fastest growing demographic cohort, with its number expected to almost double over the next 25 years, suggesting a rate in excess of 2.6%; • 40% of all people in the UK aged 65 and over are estimated to have a limiting long-standing illness, which may require care in the future; and • the recent focus on pressures within the care sector has highlighted the need to plan for care, and any government reform will provide additional focus on the limited number of solutions currently available.
2011
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Lump sum mortgage sales
New drawdown mortgage – initial advance
Existing drawdown mortgages – further advances
Source: Equity Release Council
PEOPLE AGED 60 AND OVER
25%
26.2%
27.9%
28.9%
29.3% 30.7%
17 18 16 20 21 22 19 23
2040 2035 Source: Office of National Statistics, population projections UK Percentages: 60 and over as a proportion of total UK population 15 2022 2025 2030
2050
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