FAQs

Equity release products are among the most highly regulated financial services products in the UK. As well as formal regulation that is overseen by Government, Equity Release Council members also follow a strict set of consumer-focused industry standards, established in 1991, to ensure a safe and reliable market.

Regulations require firms to have sufficient resources to withstand significant economic shocks only expected once in 200 years, so it is highly unlikely a firm would fail. If a firm exited the market, steps would be taken to protect its existing customers’ interests. There have been examples where companies have stopped writing new business or left the market and another provider or third party has assumed responsibility for its customers. Alternatively a firm may cease to provide new lending but continue to provide services to its existing customers.

There can be no change to a regulated contract’s guaranteed terms as a result, including the interest rate customers signed up to. For Equity Release Council members, this includes safeguards such as the No Negative Equity Guarantee, a fixed or capped interest rate for life and the right to remain in the property for life or until they need to move into long-term care.

Any elements of a contract that are not guaranteed which can include additional borrowing do not have to transfer to a new lender as some firms in these situations may not provide additional lending facilities. While any existing customer can seek advice about the option to re-mortgage to another product or provider, in circumstances such as a firm going into liquidation there have been examples when existing mortgage loan books have been sold to new providers and customers have had any early repayment charges (ERCs) waived to help them move.