Equity release advice

Choosing an adviser

Before an adviser can offer equity release advice to you they must have a recognised qualification, either the Level 3 Certificate in Equity Release& from the Chartered Insurance Institute or the Certificate in Regulated Equity Release (CeRER)& from the London Institute of Banking & Finance.

Before you take any equity release advice, you should check that your adviser is:

• • Registered with the Financial Conduct Authority (FCA)&
  • A member of the Equity Release Council (ERC)&

It will also be wise to ask them about their fees, what type of equity release plan they offer, and what other costs will be involved before you start.

The Equity Release Council

The Equity Release Council (ERC) guarantees that high professional standards of conduct are upheld in the ‘provision of and advice on equity release’ to protect the consumer. These standards apply to all of their members including lenders, financial advisers, solicitors, and some other organisations involved in the industry.

Any equity release advice you receive from a member, whether that advice comes from a large lender or an independent equity release adviser should follow the ERC’s code of conduct and product standards.

You can search for a member using the directory& on the ERC’s website.

Equity Release Council product standards

The ERC has set out stringent standards that equity release products must meet – the main ones are:

• • Interest rates for lifetime mortgages must be either fixed or if the rates are variable, there must be a capped interest rate for the duration of the plan.
  • You must have the right to be able to continue living in your home for the rest of your life or until you move into long-term care.
  • You are allowed to move to another property as long as it meets the eligibility criteria set out by your equity release provider.
  • Plans must have a ‘no negative equity guarantee’ which means you will never owe more than what your house is worth.
  • Before you take out any equity release scheme you must receive independent equity release advice from a solicitor, who is preferably a member of the Equity Release Council.

Before you commit to any form of equity release plan, you should be given an accurate explanation of what the plan involves, including the advantages and disadvantages, together with the terms and conditions.

You should be given information about:

• • Set up costs.
  • What happens if you want to move.
  • Any tax implications from releasing equity.
  • Your responsibilities.

Useful tips

Before you delve into equity release, take a little more time to read a few of our helpful hints on what to consider:

Consider all the alternative options

Alternatives to equity release include:

• Downsizing,
• Using your existing savings,
• Taking out a loan if you can afford to do so.

Follow this link to read our full post on the alternatives to equity release.

Consider the impact equity release might have on your eligibility for means-tested benefits.

Only borrow what you need

If you are certain that you want to proceed with equity release, then consider how much you need. Do you need a large amount all in one go or would a smaller amount with regular instalments be more suited to your requirements? Equity release has both features – ask your adviser for more information.