The Financial Services Consumer Panel has voiced concerns regarding the sale of equity release products. Ann Foster, Chairman of the FSCP said that unless the industry regulator, the Financial Services Authority maintained high standards of regulation with equity release, it had the trappings of being the next mis-selling standard.
At the moment there are no regulations surrounding equity release but this is to change. But, even with sufficient regulation, consumers must be careful not to be pressured into buying these products if they are not sure. Our advice is to always take advice from an adviser experienced in equity release.
Our View
Equity release products have been in the public eye recently due to low interest rates and rising property prices. Many pensioners have found themselves with lower returns on their savings but huge rises in property values.
We believe that equity release and home reversion schemes can be fantastic but only for the right people. Advice is crucial, even if it is just for a second opinion.
There are numerous new equity release schemes springing up following the rise in demand. More choice can be good for competition but make sure you are dealing with a company that adheres to the voluntary code of conduct laid down by SHIP (Safe Home Income Plans).