by Mark Johnston
Recent figures from the latest pensioner property index revealed that retired home owners have access to a combined property wealth in excess of £743 billion
Research conducted recently by Aviva, one of Britain’s largest insurance providers, showed that 22% of the over 55s are concerned about not having enough money upon their retirement.
Property website Rightmove reported that 40% of all sellers were now looking to downsize, therefore showing that as the baby boom generation hits retirement, those trading down now outnumber those looking to move up the housing ladder.
Equity release can help many people in their retirement years gain a better quality of life, through helping them to meet the rising costs of long term care, providing them with the opportunity to give the younger generation a helping hand and also it can just help clear any existing debts.
A person’s home is often their largest and most valuable asset, both financially and sentimentally. Therefore the decision to release the equity from it is a big one.
Equity release has had a chequered past, with huge interest rate charged and also some schemes that hit the headlines with alleged mis-selling and who left many clients feeling ripped off.
Home owners considering equity release are now currently being promised better safeguards in the form of a newly launched regulatory body.
Safe Home Income Plan (SHIP), the trade body for the equity release industry, has re-launched as the Equity Release Council (ERC). They have broadened their membership to now include advisers, lawyers, surveyors and any other interested parties.
Nigel Waterson, chairman of the Equity Release Council (ERC) said “this is a really significant day for thousands of older people in the UK”.
Members of the new organisation will develop a broader code of conduct to increase consumer safeguards which will compliment the consumer guarantees that already exist. Like its code to bind firms in to providing an easy to understand outline of their equity release plans.
The code also insists that all consumers take independent advice to oversee any transactions.
Accessibility to equity release products is also intended to be improved using that trade body’s new easy to use website.
The Equity Release Council (ERC) has also established a fraud working group to consider the impact of fraud on equity release products. The fraud working group intends to implement good practice guidelines across the industry to help ensure every possible step is taken to combat fraud.
Andrea Rozario, director general of the council stated “with housing equity likely to be at the heart of many peoples retirement planning both now and in the future, it is now vital that as an industry we adapt to meet consumers needs”.
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