ERC calls for FSA to modernise its perception of equity release

Published: 15/06/2012

The chairman of the Equity Release Council (ERC), the new regulator of the equity release sector, has described the Financial Services Authority’s (FSA) stance on the product as “outdated”.

Currently labelled as a “high risk” product, Nigel Waterson, former Conservative shadow pensions minister, is urging the FSA to re-examine is viewpoint on equity release following the establishment of the ERC:

“This approach is a bit outdated and needs to be looked at again. We hope the FSA will be more comfortable with advisers who have our kitemark because we add an extra layer of regulation and governance.”

The aim of the ERC is to ensure equity release products are safe and accessible for customers. Each member of the council – advisers, providers and solicitors alike – is signed to the ERC’s code of conduct, resulting in a number of safeguards and guarantees for customers. It is for this reason why Waterson believes the FSA should relax its equity release perception.

Equity release gives you the opportunity to release funds from your property whilst continuing to live there. Given the current shortfall in pension provisions and savings, it has grown in popularity as retirees look to supplement their incomes and allow them to live the quality of life they intended.

A spokesman for the FSA has responded to Waterson’s comments, suggesting a change in the body’s opinion could take shape in the next few months.

Content correct at time of publication