New home equity release player coming

Retirement Income Group (RIG), headed by former AXA chief executive Ralph Stewart, is planning on entering the home equity release market later this year.

The business was established in 2017 to provide variable annuiities. Retirees can buy an annuity and be guaranteed an income for life, through investment returns and insurance.

RIG is about to post its first profit, and is looking to expand its business which includes the launch of a home equity release product. This market is currently dominated by Heartland Bank, but there are a number of other very small players including SBS and First Mortgage Trust.

Stewart says the RIG product will be different to others as equity released will only be available to buy an annuity. With other HER schemes retirees can use the money for a variety of purposes including travel and vehicles.

"If we can disrupt the home equity release market with a seriously better consumer offer, our potential market increases by 200,000 households who could benefit from an improved fortnightly income backed by their home," Stewart says.

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While the business started off offering variable annuities it has built a funds management business with Garrison Bridge which offers a UK pension transfer service and it is now looking at other growth opportunities.

"Garrison Bridge Superannuation Scheme is fast approaching $100 million from a cold start in October 2016 and is making a solid contribution to RIG revenue," Stewart says.

RIG is also working with two KiwiSaver scheme providers who are considering wholesale income guarantees through their KiwiSaver scheme or managed fund products. "The company has also received interest from two defined benefit pension schemes who are seeking modern solutions and considering our income guarantee options for their members."