1. Opportunities in the Equity Release Market A product provider’s view Equity Release Roadshow, Glasgow 22 nd April 2008 Simon Cocker Head of Business Development Dunfermline Building Society

2. There has never been a better time to enter into the equity release market From a provider’s perspective From an advisor’s standpoint And critically from a customer point of view

3. Why – a provider’s perspective Quality of customer base Growing demand (aging population) Increasing demand from own customer base Good returns available vs residential mortgage market Credibility

4. Why – an advisor’s standpoint Increasing importance when conducting retirement planning advice Increasing demand Continuation in pension under provision, endowment shortfalls House is major asset – in last 10 years Changing attitudes Additional/replacement income stream Improved reputational risk

5. Why – a customer’s point of view Change in attitudes –To their house as their “castle” –To maintain lifestyle –Retire to live not await death Viable option to downsizing Drawdown is becoming increasingly attractive Improving reputation (chattering classes & SHIP increasing profile and NNEG) and regulation Liquidity crises may boost this –Get money now before house falls in value –Need to help next generation(s) onto housing ladder More recognised names entering the market

6. But what about the risks Mis–selling key risk for perceived vulnerable groups FSA mystery shopper exercise flushed out widespread poor practice Customers don’t want “dabblers” in the market Quality and quantity of introducers is key

7. We all have a role in mitigating these if the product is right for the customer Part of holistic retirement planning – a considered viable option Follow SHIP guidelines Involve the whole family Recommend a quality provider Conduct regular reviews Competition from providers will increase value and choice

8. So why has DBS sought to enter the market as both a provider and distributor Demand from our own member base Desire to have long term mortgage assets Strong fit with brand, especially in Scotland Reputational risk easing Fit with High net worth goal Opportunity to help shape and grow market Chance to offer something slightly different!

9. How do we set our pricing and manage the long term risks Crossover risk (both house price & mortality) Redemption risk Mis-selling risk

10. Which type of customers have a potential need for Equity Release? Lifestyle enhancers Pension short fallers (needing income to top up) Endowment short fallers Consolidators High net worth’s IHT planners Divorcees Plus new types?

11. There has never been a better time to enter into the equity release market From a provider’s perspective From an advisor’s standpoint And critically from a customer point of view

12. The key to growing the Equity Release market is confidence And we all have a key role in making this happen! Thank you