The Equity Release Council
Join us as we explore the Equity Release Council and how it safeguards the interests of consumers seeking equity release options.
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Page last updated – 24th February 2023
Who are the Equity Release Council?
The Equity Release Council is a trade body that was formed in 1991 in the United Kingdom with the aim of promoting the safe and fair use of equity release products, protecting the interests of consumers, and ensuring the highest standards of professional conduct among its members. The council was formerly known as Safe Home Income Plans (SHIP), but it changed its name in 2012 to better reflect its broader remit.
Equity Release Council Code of Conduct
The Equity Release Council is made up of various organizations involved in the equity release market, including lenders, advisers, and solicitors. The council’s members are required to adhere to a strict code of conduct that is designed to ensure that equity release products are marketed and sold fairly and transparently.
The code of conduct covers a wide range of areas, including advertising and promotions, product design, advice and guidance, and complaints handling.
Advertising and Promotions:
Members must ensure that all advertising and promotional materials are clear, fair, and not misleading. This includes making sure that any claims made about the benefits of equity release are accurate and not exaggerated, and that any risks associated with equity release are clearly explained. Members must also ensure that their advertising and promotions do not target vulnerable consumers, such as those with impaired mental capacity or limited financial knowledge.
Members must design equity release products that meet the needs of consumers and offer appropriate safeguards against potential risks. This includes ensuring that the products are suitable for a range of different consumers, including those with different levels of equity in their homes, and that the products are flexible enough to meet the changing needs of consumers over time. Members must also ensure that their products are designed in such a way that they do not cause undue financial hardship for consumers or their families.
Advice and Guidance:
Members must provide clear, impartial, and tailored advice to consumers to help them make informed decisions about equity release. This includes explaining the costs, risks, and benefits associated with equity release, as well as providing information about alternative options that may be available to consumers. Members must also ensure that their advice and guidance takes into account the individual circumstances of each consumer, and that they do not put undue pressure on consumers to enter into equity release arrangements.
Members must have effective procedures in place for handling complaints and must resolve complaints in a timely and fair manner. This includes providing consumers with clear information about how to make a complaint, acknowledging complaints promptly, and keeping consumers informed about the progress of their complaint. Members must also ensure that they learn from complaints and use the feedback to improve their products and services.
Training and Competence:
Members must ensure that their staff are appropriately trained and competent to provide advice and guidance on equity release products. This includes ensuring that their staff have a good understanding of the equity release market and the products that are available, as well as having the skills to communicate effectively with consumers. Members must also ensure that their staff are regularly trained and updated on changes to the market and to regulatory requirements.
Members must comply with all relevant laws, regulations, and industry guidelines, and must ensure that their products and services meet the highest standards of consumer protection. This includes complying with regulations such as the Financial Conduct Authority (FCA) rules on mortgage lending and advice, as well as ensuring that their products and services are designed to meet the needs of consumers and to provide appropriate safeguards against potential risks.
Equity Release Council Industry Standards
In addition to its code of conduct, the Equity Release Council has established a set of standards that its members must meet in order to ensure that they are offering safe and fair equity release products to consumers.
These standards cover a range of areas, including the design of equity release products, the way in which they are marketed and sold, and the way in which advisers provide advice to consumers.
Independent Legal Advice:
Consumers must receive independent legal advice from a solicitor who is not affiliated with the equity release provider before entering into an equity release arrangement.
This ensures that consumers fully understand the legal implications of equity release and that they are aware of any potential risks.
No Negative Equity Guarantee:
Members must offer a ‘no negative equity’ guarantee with their equity release products, which means that consumers will never owe more than the value of their home. This provides peace of mind for consumers and ensures that they are protected against the risk of negative equity.
Flexible Repayment Options:
Members must offer flexible repayment options with their equity release products, which means that consumers have the option to repay some or all of their loan without incurring early repayment charges.
This gives consumers the flexibility to manage their equity release arrangements in a way that best suits their individual circumstances.
Members must offer inheritance protection with their equity release products, which means that consumers have the option to ring-fence a portion of the equity in their home to leave as an inheritance for their loved ones.
This ensures that consumers can still leave an inheritance to their beneficiaries, even if they have released equity from their home.
Members must ensure that the interest rates on their equity release products are fair and transparent, and must provide consumers with clear information about the costs of equity release.
This includes providing information about the interest rates, any fees or charges, and the potential impact on the value of the consumer’s home.
What Impact Has The Equity Release Council Had On The Industry?
The Equity Release Council has had a significant impact on the equity release market in the UK, helping to promote the safe and fair use of equity release products and protecting the interests of consumers.
According to the council’s own figures,
Total lending for 2022 reached £6.2bn, a 29% increase from £4.8bn in 2021 and a new annual record for the market. It means the equity release market has doubled in size over the last five years, having seen £3.06bn of annual lending in 2017.
The council’s code of conduct and member standards have helped to ensure that equity release products are marketed and sold fairly and transparently, and that consumers are provided with clear and impartial advice about their options.
The council’s focus on consumer protection has also helped to build trust in the equity release market, encouraging more consumers to consider equity release as a way of unlocking the value in their homes.
Resources & Guidance
In addition to its code of conduct and member standards, the Equity Release Council also provides a range of resources and guidance for consumers who are considering equity release. This includes an online calculator that can help consumers estimate how much equity they may be able to release from their home, as well as a directory of independent financial advisers who specialize in equity release.
The council also runs a voluntary register of advisers who have met its standards for knowledge, skills, and ethical behavior, and provides ongoing training and development opportunities for members. This helps to ensure that consumers can access high-quality advice and support from professionals who are knowledgeable about equity release and committed to providing the best possible service.
In addition to promoting consumer protection and best practices within the equity release market, the Equity Release Council also works to raise awareness of the potential benefits of equity release. This includes highlighting the ways in which equity release can help consumers to fund their retirement, pay for long-term care, or make home improvements, as well as addressing common misconceptions and concerns about equity release.
Equity Release Council Contact Details
Phone: 0300 012 0239
Overall, the Equity Release Council plays a vital role in promoting the safe and responsible use of equity release products in the UK, and in protecting the interests of consumers who are considering this option.
Its code of conduct and member standards help to ensure that equity release is marketed and sold fairly and transparently, and that consumers receive clear and impartial advice about their options.
As the equity release market continues to grow, the council’s work will remain essential in helping to ensure that consumers are protected and empowered to make informed decisions about their financial future.
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