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Wednesday, November 25, 2009

Prudential withdraws from equity release market

For a lot of the 50-plus, certainly the 70-plus, the expectation was that if "pushing comes to shoving" then their house would provide an income stream by use of equity release (reverse mortgage).

In a surprise move the Prudential said on Tuesday that it is to stop selling equity release products.

The Prudential, one of the top three providers, has been selling lifetime loans since 2005, but its decision to withdraw is believed to be due to access to funding for the loans.

It is not just The Prudential that has decided to call it a day. The number of providers of this financial service has dropped from 20 to 11 over the past year.

Maybe this is a temporary blip. If it is the start of an avalanche, then there will be a lot of worried older people. Dick Stroud

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