What’s the Equity Release Council and Why Does It Exist?

Do You Want to Know Everything About the Equity Release Council (ERC)? Learn What the ERC Does and How Often Members Are Reviewed. Keep Reading to Find Out More.
  • Last Updated: 07 Feb 2024
  • Fact Checked
  • Our team recently fact checked this article for accuracy. However, things do change, so please do your own research.

Contributors:

Francis Hui

Key Takeaways

  • The equity release Council plays an essential role in ensuring the protection of consumers by setting high standards for providers in the UK equity release market.
  • They can help you by providing information on safe equity release plans and ensuring you deal with providers that meet their strict standards.
  • The Council is a reliable source as it is a self-regulatory body working to protect and educate consumers in the equity release sector.
  • The guidelines set by the equity release Council include ensuring products have a no negative equity guarantee and allowing the right to remain in your home for life.
  • You can get in touch with them through their official website, where you can find their contact information, or by writing a letter to their registered office in London.

The Equity Release Council (ERC) serves to protect the interests of homeowners considering equity release for retirement.

As a non-profit organisation founded in 19911, it ensures safety and a high standard of service.

Given its troubled history of scandals and debt, equity release hasn't always been viewed as the best option for retirees.

The question is, "Equity release, is it safe", and have things changed?

In This Article, You Will Discover:

    Our dedicated editorial team has spent countless hours researching several plan providers, summarising the important work of the Equity Release Council, and compiling this detailed guide.

    So, what do you need to know about the Equity Release Council?

    Let’s get into it

    What Is the Role of the Equity Release Council in the UK?

    The Equity Release Council is the industry body for the equity release sector in the UK.

    It is dedicated to safeguarding homeowners' interests, ensuring high standards of conduct, and promoting safe equity release products.

    It sets stringent regulations for its members, which include providers, financial advisors, solicitors, and surveyors in the equity release market.

    Moreover, the Council provides invaluable support by offering education and awareness to consumers and policymakers about equity release.

    Its role is pivotal in enhancing understanding about safe equity release schemes and empowering homeowners to make informed financial decisions.

    By advocating transparency, it ensures that consumers can access the benefits of equity release without undue risk.

    Who’s the Equity Release Council?

    The Equity Release Council (ERC) is a trade body that was founded in 1991, with the purpose of representing the equity release sector.2 

    The Council’s dedicated to upholding and promoting high standards of consumer protection within the industry of equity release.

    How’s it done?

    ERC members strictly adhere to a comprehensive code of conduct. 

    This code of equity release council rules includes important safeguards such as the No Negative Equity Guarantee, ensuring that homeowners will never owe more than the value of their property, and the right to remain in their homes for life. 

    By implementing these measures, the ERC works diligently to ensure the well-being and peace of mind of individuals engaging in equity release transactions.

    What’s Equity Release & How’s the Council Involved?

    Equity release is an umbrella term for a collection of financial products that allows homeowners aged 55 and above to access their property's value while remaining in it. 

    Good news

    As equity release is a regulated industry in the UK, the ERC focuses on safeguarding the interests of homeowners seeking equity release products. 

    The Council plays a key role in instilling consumer confidence and well-being.

    How’s this goal achieved?

    The ERC has established a comprehensive set of safeguards, standards, and best practices that its members must adhere to. 

    These guidelines create a solid foundation for homeowners, ensuring a secure and reliable equity release process.

    By selecting providers who follow these rigorous measures, consumers can have peace of mind, knowing they’re dealing with reputable and trustworthy lenders. 

    It’s about trust

    This commitment to a secure environment enhances the overall experience for those seeking equity release, strengthening their trust in the industry.

    How Does the Equity Release Council Support Consumers?

    The Equity Release Council supports customers by enforcing industry standards and safeguards. 

    According to its webpage, the Council’s dedicated to protecting homeowners by promoting transparency, fairness, and best practices.3 

    Additionally, the Council has a complaints and resolution process to handle disputes between a consumer and a Council member.4 

    The ERC Code of Conduct, Rules, Guidance & Product Standards

    The ERC Principles and Outcomes set the ethical standards and values for member firms in equity release activities. 

    They encompass treating customers fairly, providing clear information, ensuring independent legal advice, and offering flexible product options. 

    The ERC’s also established Rules and Guidance governing member behaviour, which are continuously updated. 

    Crucially, comprehensive Product Standards are in place that members must meet when designing and offering equity release products. 

    These Product Standards include:

    • Lifetime mortgage interest rates must be fixed each time funds are released, or capped if variable.
    • You’ll be entitled to live in your home until you pass away or until you need long-term care if it remains your primary residence and you comply with the contract's terms and conditions.
    • You’ll be able to relocate to a different property and take your equity release loan with you, provided that your provider deems the new location acceptable as ongoing collateral.
    • Your equity release loan must include a No Negative Equity Guarantee. This means that if, after deducting fees from the sale of your property, the remaining amount isn’t enough to repay the loan, neither you nor your estate will be required to make additional payments.
    • You’ll be allowed to make partial repayments free of penalties, as long as your repayments comply with the lending criteria.

    These standards aim to foster a trustworthy environment and enhance consumer confidence in equity release.

    What Organisations Are Part of the Equity Release Council?

    Organisations working with equity release that may be a part of the Equity Release Council include advisory firms and equity release providers, among others.

    You can confirm the ERC membership of the following by searching for them on the ERC’s register: 

    Avoid working with any product or service providers that aren’t Council members.

    Complaints & Disputes With Equity Release Council Members

    Complaints and disputes with Equity Release Council members, or with unregulated lenders and practitioners in the industry, can arise for various reasons.

    Working with a regulated lender may result in a better experience.

    However, there are instances where you may need to raise a complaint, such as:

    • Mis-selling: If you believe you were misled or given incorrect information during the equity release process, you have the right to voice your concerns.
    • Unsatisfactory service: Should you encounter subpar customer service, delays, or communication problems with your equity release provider, it’s important to address these issues.
    • Contractual disputes: If disagreements arise regarding the terms, conditions, or obligations stated in your equity release agreement, it’s crucial to seek resolution and clarity.

    Identifying and addressing these concerns can lead to a fair and satisfactory equity release experience.

    The Complaints Process

    The complaints process involves a number of steps.

    Let’s take a look:

    1. Contact the relevant Equity Release Council member to raise your complaint, clearly stating your concerns and providing supporting documentation.5
    2. The company must acknowledge your complaint within five working days and provide a written response within 20 working days.
    3. If the company's response does not satisfy you, escalate the matter to their designated complaints officer.
    4. The complaints officer will independently review the case and aim to provide a fair resolution within 15 working days. Provide any additional evidence or details that support your complaint.
    5. If you are still dissatisfied with the complaints officer's decision, you can escalate the matter to the independent adjudicator appointed by the Equity Release Council.
    6. The adjudicator will conduct a thorough review and make an impartial decision within 15 working days.6

    If you’re not satisfied with the adjudicator's decision, you can explore alternative dispute resolution options like mediation or arbitration, which can help facilitate a resolution without formal legal proceedings.

    Arbitration Process for Unresolved Complaints

    The arbitration process for unresolved complaints is relatively straightforward. 

    Here’s how it works:

    1. If the complaint remains unresolved, both parties can choose arbitration.
    2. The Equity Release Council provides access to an independent arbitration service, where an impartial third party will consider the evidence presented by both sides and make a binding decision.

    Typically, the cost of arbitration’s shared equally between the homeowner and the ERC member.

    How to Become a Member of the Equity Release Council

    To become a member of the Equity Release Council, there are certain steps to follow. 

    Let’s take a look at what’s required.

    Membership Criteria

    To become a member of the Equity Release Council, providers must meet specific criteria designed to ensure high standards and consumer protection.7 

    Some key membership requirements include:

    • Regulatory Authorisation: Equity release providers must hold the necessary regulatory authorisation from the Financial Conduct Authority (FCA) to operate in the UK. The FCA regulates and supervises financial firms to ensure they meet the required standards.
    • Independent Legal Advice: Members must ensure that customers receive independent legal advice from a qualified professional who is experienced in equity release. This requirement protects consumers and ensures they fully understand the implications of their decision.
    • Clear and Transparent Communication: Council members must communicate clearly and provide accurate information to consumers. This includes explaining the features, costs, and risks associated with equity release products.

    Application Process & Timeline

    To apply for membership, you need to follow a straightforward process outlined by the Equity Release Council on its website.8 

    The steps involved are:

    Step 1: Complete the Application Form: Obtain the application form from the Equity Release Council's website and carefully fill it out with accurate and up-to-date information.

    Step 2: Submit Supporting Documents: Along with the application form, you will need to provide supporting documents.

    Step 3: Pay the Membership Fee: There is an annual membership fee associated with joining the Equity Release Council. Ensure you pay the fee promptly as specified.

    Step 4: Await Approval: Once you submit your application, it will be reviewed by the Equity Release Council. They will determine your eligibility based on the information and supporting documents you provide.

    Applications can take up to 4 weeks, depending on the nature of the application.

    Common Questions

    What Is the Role of the Equity Release Council?

    How Can the Equity Release Council Help Me?

    Is the Equity Release Council a Reliable Source?

    What Are the Guidelines Set by the Equity Release Council?

    How Can I Contact the Equity Release Council?

    In Conclusion

    The Equity Release Council plays a pivotal role in promoting consumer protection, setting industry standards, and providing valuable resources for equity release in the UK. 

    As a homeowner considering equity release, it’s crucial to work with a provider who is a member of the Council.

    By doing so, you can ensure that your financial needs are met with transparency, fairness, and the highest level of professionalism. 

    Remember, the Equity Release Council exists to protect and empower you as you unlock the power of your home's value in retirement.

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