The Equity Release Council (“The Council”) is a voluntary body which aims to ensure that its members are highly professional and act with integrity and transparency in offering high-quality products and services to customers.
The Standards Board is incorporated as part of the Equity Release Council and exists to ensure that equity release products are safe and reliable for consumers.
It sets the standards and principles for members of the Equity Release Council that are set out within this document. Through these standards, members can guarantee their customers that they offer products and services which conform to the best practices of the sector, ensuring customers are fully informed and properly protected.
The Chair of the Standards Board is tasked with ensuring that the Equity Release Council is constantly driving up standards within the sector and sharing best practice and innovation so that people who use products and services from Equity Release Council members can feel confident in their choice. The Board has three independent members and representation from each of the provider, adviser, solicitor and surveyor membership.
“Allowing people to access some of the savings built up in the value of their homes could help fill the increasing gap in retirement incomes and long-term care costs, but people must have confidence that they will be treated fairly if they consider this option, which is why the maintenance of the highest standards of consumer protection is so essential. The Equity Release Council and its Standards Board bring together the wider equity release sector in a shared objective of providing a safe mechanism for equity release to a much larger group of people,” Chris Pond, Chair of the Standards Board.
Our product standards are set out below. Our members are only allowed to tell you that a product meets these product standards if it meets all of them. If you are offered or are considering a product that does not meet all of the standards, the product literature must explain which standards are not met, and give an illustration of the types of risk that this might pose for you.
Our product standards are as follows:
- For lifetime mortgages, interest rates must be fixed or, if they are variable, there must be a “cap” (upper limit) which is fixed for the life of the loan.
- You must have the right to remain in your property for life or until you need to move into long-term care, provided the property remains your main residence and you abide by the terms and conditions of your contract.
- You have the right to move to another property subject to the new property being acceptable to your product provider as continuing security for your equity release loan.
- The product must have a “no negative equity guarantee”. This means that when your property is sold, and agents’ and solicitors’ fees have been paid, even if the amount left is not enough to repay the outstanding loan to your provider, neither you nor your estate will be liable to pay any more.
- All customers taking out new plans which meet the Equity Release Council standards must have the right to make penalty free payments, subject to lending criteria.
Independent legal advice
You may choose your own solicitor to carry out the legal work in connection with your plan. Before the plan is completed, your solicitor will be provided with full details of the plan, including the rights and obligations of both parties (you and your product provider) under the contract, should you choose to go ahead. Both you and your solicitor will be required to sign a certificate confirming that these rights and obligations have been explained to you and that you wish to enter into the plan.
Information about and explanation of your equity release plan
You will be provided with a fair, simple and complete presentation and explanation of your equity release plan. The benefits and limitations of the plan will be clearly set out, together with your obligations under the terms of the contract. You will be given information about:
- all the costs that you will have to bear in setting up the plan;
- the tax implications;
- what will happen if you wish to move to another property; and
- how changes in house values may affect your plan.
1. ERC members added value customer offer – ‘Our unique USP’
2. Limit of customer offer for non ERC members