“We were pleased to note Andrew Bailey’s acknowledgement in his new role that equity release can have an appeal and potential benefits, as part of his wide ranging speech on pensions and long-term retirement savings. We agree with the assessment that the issue of later life funding is of utmost importance to society, and also his caution about over-weighting on any one asset class within pension savings, or indeed more generally.

“Nevertheless, the growth of house prices gives older people – especially those who are asset-rich but cash-poor – an important option to boost the retirement income they receive from other sources in an environment where savings are stretched. Equity release is not the answer for everyone, and certainly not the only solution to funding later life – but it is an important part of the mix and is increasingly seen as such by  regulators, providers, advisers and consumers.  In particular, it can be an invaluable way to allow people to remain in the homes they’ve worked for and lived in, which Mr Bailey also acknowledges.

“Regarding the costs he highlighted, growing competition in the market has resulted in record-low interest rates and new flexibilities appearing in recent years. These include products allowing the repayment of interest or capital where the customer can afford to, thereby reducing the overall cost, as well as products offering downsizing protection. It is important to remember that funding and pricing for lifetime mortgages differs from residential mortgages because of their inherently different features: for example, the guarantee of a fixed or capped rate loan for an indefinite period as well as security of tenure.

“Similarly, the no negative equity guarantee is an important source of reassurance  and security for consumers,  protecting them from the risk of a downturn in house prices and a repayment commitment which exceeds the value of their home. The fact that providers have born this risk for consumers since the first industry Standards were established in 1991 has been a vital part of establishing a safe and reliable equity release market.”

-ENDS-

For further information, please contact:

Andy Lane or Will Muir at Instinctif Partners, on 020 7457 2020 or email

[email protected]

About the Equity Release Council – www.equityreleasecouncil.com 

The Equity Release Council is the industry body for the equity release sector, which represents over 400 members including providers, qualified financial advisers, solicitors, surveyors and other industry professionals.

It works to ensure a safe equity release market for consumers, by operating rigorous Standards for the provision of advice and products which guarantee security of tenure and financial protections. 2016 marks the 25th anniversary since the first industry Standards were created for equity release in 1991. Since then, over 350,000 consumers have taken out an equity release plan from Council members, drawing on almost £17bn of housing wealth.

The Council also works with consumers, industry and policy makers to improve awareness and understanding of equity release and the potential for housing wealth to help solve many of the financial challenges facing people over the age of 55 across the UK.