Author Archives: Alan

Financing the family home through equity release has seen some serious changes in the last 20 years. So let’s put the record straight and answer some myths about equity release. House prices have more than doubled*; endowment mortgages have been and gone; and thanks to the biggest financial crisis since The Great Depression, lenders have transformed from carefree chancers, into over-cautious officiators. The equity release market has come a long way, too. Since the Equity Release Council (ERC, formerly SHIP) was established in 1991, products have become much more flexible, customer focused and financially appealing. So it’s high time we [...]

The Financial Conduct Authority – About Sale and Rent Back (SRB) Since 30 June 2010 we have regulated firms that offer sale and rent back (SRB) to consumers. This replaced our interim regime, which ran from 1 July 2009. SRB involves people selling their home, usually at a discount, in exchange for the right to remain in the property for a minimum of five years. Summary of FCA requirements Our rules are designed to help protect consumers. We want to prevent high-pressure and inappropriate sales, and help consumers understand SRB products so they only enter into SRB where it is [...]

I’ll address the elephant in the room before I begin – the equity release market has often endured a mixed response from the mainstream media in recent years and, as a result, public perception is not always as positive as those who work in the sector would like it to be. Despite advisers and providers stating time and again that equity release may not be the most suitable option for all older homeowners, home reversion plans and lifetime mortgages have often been pilloried by commentators concentrating on a handful of negative experiences rather than the thousands of positive ones; not [...]

Older homeowners who are asset-rich but cash poor often turn to equity release to raise tax-free cash against the value of their properties to help fund home improvements or to go on holiday, or simply to treat family or friends. However, new figures from specialist adviser Key Retirement Solutions show that almost one in five are now using equity release to repay outstanding mortgages. “There are a number of reasons for this,” says Dean Mirfin from Key Retirement Solutions.  “The first is as a result of investment shortfall, typically endowment, where the maturity values are consistently falling short of their [...]

This is a note to explain the changes being made on 1st April 2013 because it affects equity release providers and financial advice organisations as they come under the new Financial Conduct Authority (FCA). The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; contributing to the protection and enhancement of the stability of the UK financial system. On 1st April 2013, the FSA will be replaced by the Financial Conduct Authority and Prudential Regulation Authority as [...]

As more and more people over the age of 55 look into the future and begin to plan their retirement, the focus is on how they will finance their later years. This is why the value of their home becomes a very valuable asset, along with pensions, investments and savings. But where do you go for expert advice? 1. Direct to an equity release provider? It is possible to go direct to an equity release product provider for an equity release scheme. The majority of equity release providers are members of the Equity Release Council (ERC). But bear in mind, [...]

Pensioner poverty could be eased if Britain’s elderly release equity in their homes, revealed findings from research carried out by Oxford Economics. The research showed that of the1.7 million pensioners classified as being in poverty, 60% owned their own homes outright. Stephen Lowe, group external affairs and customer insight director at Just Retirement, said: “The squeeze on pensioner income is very real and only likely to tighten in the coming decades as defined benefit schemes are replaced by less generous pensions and the state is forced to focus its limited resources on those who need it most.” The report uses [...]