The Equity Release Council (the Council) today launches a new version of its Standards which includes a new Consumer Charter and introduces a sixth Product Standard. Effective from 06 May 2025, these Standards set best practice within the equity release industry, providing a higher level of consumer protection than any other form of property-based loan.

· The latest update introduces a new Consumer Charter outlining what customers can expect from Equity Release Council members

· Sees the introduction of a sixth standard, enabling customers to move into a relative’s home to receive care without incurring an early repayment charge

The changes were made following input from eight working groups as well as a consultation with the focus being to make the standards clearer and more accessible while continuing to uphold the highest level of protection for consumers.

New Consumer Charter:

As part of the Standards refresh, the Council is delighted to launch a new Consumer Charter. This document, which members will be encouraged to use with customers, outlines what people can expect when working with an Equity Release Council member. All customers will be able to trust in a tailored, thorough and transparent process that ensures they received the right outcome based on their individual circumstances.

This builds on the work that began when clear consumer-focused equity release product standards were first introduced in 1991. The Standards have continually evolved since then and have been fundamental to establishing trust in the market which has supported almost a million customers over that period.

Sixth Product Standard Clarifies Rules on Care:

Historically, if a customer moved into care in a formal setting such as a care home, the Early Repayment Charge (ERC) was waived. However, the new Product Standard expands this to waive the ERC if the person moves in with relatives to receive care and a medical practitioner’s certificate is provided.

With the number of people aged 85+ expected to grow by 62.7% by 2043*, there is a need for older people to have access to flexible financial solutions in later life to support them through a number of circumstances. In this case, Council members upholding this standard will ensure that later life customers are safe in the knowledge that they can repay their loan when going into care without incurring additional costs.

All Council members are required to adhere to the Standards and principles which safeguard customers by ensuring they are fully informed, and products and services adhere to best practice.

The Equity Release Council Product Standards are:

· Interest Rates: For lifetime mortgages the rate must be fixed for each release or, if variable, the rate must be capped for the life of the loan.

· Home for Life: 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.

· Option to Move Home: 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.

· No Negative Equity Guarantee (NNEG): 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.

· Ability to Make Repayments: 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.

· Long-term Care: If a customer needs to move permanently into long-term care – whether in a care home or with relatives providing care – any early repayment charge will be waived by the Lender upon receipt of a medical practitioner’s certificate and the terms and conditions of the loan have been met

[TRADE QUOTE]

Michelle Highman, Chair of the Equity Release Council Standards Committee, comments: “Significant work went into refreshing the Standards with the aim to make them clearer, more accessible and more consumer focused. Over a 12-month period, eight working groups went through the standards line by line before we consulted with our members and the wider industry to reach the final version. As part of this, we have developed a new product standard and unveiled our first Consumer Charter.

“Customers look to the Equity Release Council to give them confidence to explore whether accessing housing wealth is right for them, and the Consumer Charter clearly outlines what they can expect from our members. We expect them to be able to trust in a tailored, thorough and transparent process that ensures they received the right outcome based on their individual circumstances.

“The Council and our members continually strive to grow our market and ensure that later life lending works for the greatest number of consumers possible. While equity release may not be right for everyone, for many it can be an essential lifeline to achieve the retirement they want and today’s launch means they can continue to do this with confidence.”

[CONSUMER QUOTE]

Michelle Highman, Chair of the Equity Release Council Standards Committee, comments: “For thirty years, the Equity Release Council has worked hard to support customers who want to understand how they can access their housing wealth, and our Standards are a fundamental part of this. Today’s reboot of the Standards is designed to make them clearer, more accessible and more consumer focused as well as provide added protections for older homeowners and their families.

“The new Consumer Charter outlines exactly how people who use a member of the Council should expect to be treated. Consumers should expect that they can trust in a tailored, thorough and transparent process that ensures they received the right outcome based on their individual circumstances. It is designed to help people confidently explore all their options and if they choose to take out a product, it highlights how they will to be treated for the life of the loan.

“We are also excited to unveil our 6th product standard which means that whether a person chooses to go into a formal care setting or receive care in a relative’s home, they will not pay an early repayment charge if they have a medical certificate. With an aging population, more people need care and support, but a care home is not always a person’s first choice, this change gives customers more freedom to find the right option for them.

“A significant amount of hard work has gone into updating these standards and we are pleased that not only do they offer greater protections to customers, but are designed to continue to build trust in this industry.”

ENDS

Notes to Editors

*Age UK, The State of Health and Care for Older People, 2023 https://www.ageuk.org.uk/siteassets/documents/reports-and-publications/reports-and-briefings/health–wellbeing/age-uk-briefing-state-of-health-and-care-july-2023-abridged-version.pdf

** Among homeowners aged 55 – the age where homeowners can access property wealth via equity release products – key motivations for releasing money from their homes include the desire to pay for care at home (17%), boost their retirement income (16%), or to fund travel plans (15%). All findings come from independent research carried out by Censuswide among 5,000 nationally representative UK adults aged 18+ in June 2021 and November 2023. Combined with analysis of government, regulatory and industry data, Home Advantage represents the Council’s biggest study to date of consumer attitudes and behaviours in relation to their personal finances and property wealth. The 2023 edition of the research is supported by Equity Release Supermarket, as well as Canada Life.

About the product: Equity release allows older people to access the wealth in their homes, without necessarily having to sell or move. Lifetime mortgages make up more

than 99% of the market. They enable people to borrow against their homes without making repayments unless they choose to. The loan and interest, or part thereof, is paid when the customer dies or goes into long term care. Since 1991, more than 950,000 homeowners have accessed £50bn of property wealth via Council members to support their finances.

About the Council: The Council is the representative trade body for the UK equity release market. Plans that meet the Council’s standards come with five product safeguards: no negative equity guarantee; fixed or capped rates for life; the right to port; the right to make overpayments; and secure tenure for life. These safeguards are underpinned by mandatory independent legal advice which ensures the customer understands the risks and implications of the plan.

More information: Visit www.equityreleasecouncil.com; call Lee Blackwell, Director of Communications and Marketing at the Equity Release Council on 07950798072; email [email protected]