Equity Release Council responds to proposals for a ‘UK Equity Bank’

Nigel Waterson, Chairman of the Equity Release Council, comments on proposals set out in the ‘UK Equity Bank: towards income security in old age’ report:

“The debate over income security in old age brings welcome attention to a social issue that urgently needs addressing by government. It’s more crucial than ever that we provide a range of financial solutions to serve our ageing population – but reinventing the wheel is not the way to go about it and may store up new problems for the state and consumers.

“The equity release sector is currently growing from strength to strength, with lending at pre-recession levels as more people look to their property wealth to solve their savings shortfall. Two in three plans agreed already allow the gradual drawing down of funds, addressing the all-important issue of low retirement incomes. The market continues to evolve with new product flexibilities – such as the ability to pay interest as you go – and most importantly, stringent safeguards like the ‘no negative equity guarantee’ which mean consumers can explore equity release with security and confidence.

“It’s unlikely that a ‘simpler’ alternative can offer the same consumer protections and rival the structured financial advice, face-to-face legal guidance and product safeguards that come as standard, overseen both by industry and financial regulators. There is undoubtedly a role for government to play, but instead of taking on a provider’s responsibilities and the associated risks, we urge government to throw its support behind the industry and work to raise awareness and promote better understanding of and access to equity release.”