A decade of unprecedented opportunity

1. Just Retirement Holistic planning for Baby-Boomers Plan Today, Profit Tomorrow For Intermediary Use Only 1

2. Agenda The baby-boom generation The changing nature of retirement Pensioner assets and incomes Holistic Retirement Advice Annuity information Equity Release 2

3. Ageing in the UK population 3 Source: ONS, 2008

4. Demos: The New Old Baby boomers at forefront of radical social, economic and political change within the family, within the education system, within the labour market, and beyond. Dramatic impact in later life. Retirement could become a very liberating space Self-employment among older people has increased significantly in the last two decades. 5 per cent in 1978 12 per cent in 1999. 50.5% would ‘rather be a self-employed entrepreneur’ Source: Demos:The New Old, 2003 4

5. Baby boomers Insurgent Liberal Individualist / non-conformist Counter-culture Less deferential Less trusting of those in authority More hostile to organised religion More control Consumption More comfortable with debt 5

6. Retirement assets becoming more complex Demise of guaranteed predictable pensions Increase of multiple DC schemes Increase of non pension assets in place of some pensions savings Main residence / Second or more properties Shares and collective investments Investment bonds Deposits and related bank savings National Savings 6

7. Risks increasing and complex Longevity Asset allocation and market volatility Inflation Morbidity – costs and impacts Care Inheritance matters Advice at- and in-retirement in short supply 7

8. Nature of pension provision is changing … 8 Source: GAD/ONS 1979-2007

9. Pensioner incomes vary widely Breakdown of pensioner incomes 9 Source: Pensioners Income Series, DWP 2006-2007

10. Annuity sales by premium - 2008 96% below £100,000 Number of Contracts Fund Size Source: ABI, Q4 2008 10

11. Retirement 30’s 40’s 50’s 60’s 70’s 80’s Net Average Personal Wealth Asset Accumulation Asset Decumulation Protection 3 Primary Needs Accumulate effectively Protect efficiently Decumulate effectively 11

12. Retirement advice is a very broad field 12 “Help me to understand and address my financial risks in retirement”

13. Possible retirement advice business Ages 55 and above Assets (excl. property) £100k to £1m Wealth Management Divorce Investment platform Tax Portal / assisted purchase Outsourced or referred Estate planning Thru-retirement Planning Risk profiling Asset Allocation Fund Selection Portfolio Management 13

14. General Advice Business 14 250-500 clients per adviser Relationships Sales Co-ordination General Advice Low Cost Delivery Outsourced / Referred

15. Consumers need more information Many don’t understand they have to annuitise Unaware of shopping around and OMO 10% could describe annuity accurately Annuity features and choices not understood Security and guarantees a priority Decisions won’t be made quickly Many would use web to research, plan and decide Need validation Help to understand options is poor Need to understand impact of choices as they make them Source: Just Retirement, 2008 15

17. Profitability

18. Longevity risks

19. Investment management

20. AdministrationThere is a range of solutions available to advisers.

21. How are People Using Equity Release? Clearing Debt - loans, credit cards & mortgages Gifting - pay for grandchildren education, help them get on property ladder Increase income, augment pension, meet standard of living requirements Home Improvement - repairs, maintenance, extension Home buying - for new home or second home Leisure & holiday - new car, cruise etc. 17 Source: JRS use of borrowing, 2009

22. Equity Release – The Opportunity Growing retirement sector Increasing need for improved financial management in retirement, Equity release allows customers to realise the value of their property for a better retirement Opportunity for companies with right proposition to offer equity release Provide an increasingly important added value service High level of interestand people researching 18

23. Equity Release – The Opportunity Number of ways to introduce equity release into portfolio of products Qualification ER1 counts towards Diploma at certificate level Natural extension for mortgage qualification Equity release isn’t only about major purchases Help pay for other key services i.e. domiciliary care, private medical insurance premiums, debt refinancing, monthly income It can change lives 19

24. Summary Growing segment Growing risk and confusion Variety of emerging needs and circumstances Variety of potential business models Opportunity 20