The Equity Release Council (ERC) serves to protect the interests of homeowners considering equity release for retirement, protecting consumers through strict product standards, advice guidelines, and safeguards like the no negative equity guarantee.

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

Given it’s troubled history of scandals and debt, equity release has not always been viewed as the best option for retirees.

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

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?

Therefore…

Who Is the Equity Release Council and Their Role in the UK Equity Market?

The Equity Release Council is a UK body that ensures equity release products are safe and transparent, advocating for consumer protection and industry standards.

Who is the Equity Release Council?

The Equity Release Council (ERC) is a trade body that was founded in 1991 to represent the equity release sector.² 

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

How is it done?

ERC members strictly adhere to a comprehensive code of conduct. 

This 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 Role Does the Equity Release Council Play in the UK?

The Equity Release Council plays the role of 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.

It’s role is pivotal in enhancing understanding of 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.

How the Equity Release Council Protects Consumers in the UK Market

The Equity Release Council protects consumers by setting high standards for products and advice, including safeguards such as the no negative equity guarantee, in the equity release market.

What Is the Mission and Role of the Equity Release Council in Protecting Consumers?

The mission of the Equity Release Council is to safeguard consumers by promoting high standards, transparency, and fair practices within the equity release market.

By setting high standards for its members, the ERC focuses on safeguarding homeowners’ interests, promoting transparency, and ensuring products are fair and clearly understood.

This mission supports consumers in making informed decisions about equity release, providing peace of mind that they are dealing with reputable companies and advisors.

How Does the Equity Release Council’s Code of Conduct Protect You?

The Equity Release Council’s Code of Conduct offers several layers of protection for consumers by mandating that all plans come with a no-negative-equity guarantee, meaning you will never owe more than your home’s value.

The Code also ensures you have the right to remain in your property for life, provided the property remains your main residence.

These measures are in place to protect you financially and secure your housing stability.

What Specific Protections Do the Equity Release Council’s Rules Offer Consumers?

The Equity Release Council’s rules offer consumers protections like the no negative equity guarantee, clear advice standards, and the right to remain in their home for life.

Additionally, the rules require all customers to receive independent legal advice.

This ensures you fully understand the equity release plan and it’s implications.

Additionally, the ERC promotes clarity in all documentation, ensuring that fees, charges, and plan details are transparent and straightforward, preventing any surprises.

How Is the Equity Release Council Involved in Equity Release?

The Equity Release Council is involved in equity release by setting standards for the industry, ensuring products are safe and consumer rights are protected.

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 is this goal achieved?

The ERC has established a comprehensive set of safeguards, standards, and best practices that it’s 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 are dealing with reputable and trustworthy lenders. 

It is all about trust…

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

In What Ways 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 is 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 

Equity Release Council Code of Conduct, Rules, and Standards Explained

The Equity Release Council’s Code of Conduct, rules, and standards focus on fair treatment, transparency, and security for consumers using equity release products.

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 will 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 will 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 is not enough to repay the loan, neither you nor your estate will be required to make additional payments.
• You will 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.

Who Are the Members of the Equity Release Council? Verification Explained

Members of the Equity Release Council include advisors, providers, and solicitors, all verified through membership listings on the Council’s official website for consumer confidence.

Which Organisations Comprise the Equity Release Council?

Organisations that comprise 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… 

• Advisers
• Solicitors
• Providers
• Associates
• Affiliates

Avoid working with any product or service providers that are not Council members.

How Can You Verify Equity Release Council Members and Solicitors?

To verify Equity Release Council members and solicitors, you can visit the ERC’s official website, which features a comprehensive directory.

This resource allows you to search for and confirm the accreditation of equity release providers and advisors.

Ensuring you are dealing with ERC members adds an extra layer of security, as these professionals must adhere to the Council’s strict standards and Code of Conduct.

How Complaints and Disputes Are Handled by Equity Release Council Members

Complaints and disputes with Equity Release Council members are handled through a structured process, ensuring fair resolution in line with the Council’s stringent standards and consumer protections.

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

Working with a regulated lender will 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 below par customer service, delays, or communication problems with your equity release provider, it is important to address these issues.
• Contractual disputes: If disagreements arise regarding the terms, conditions, or obligations stated in your equity release agreement, it is crucial to seek resolution and clarity.

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

What Is the Complaints Process Within the Equity Release Council?

The complaints process within the Equity Release Council involves a number of steps.

The process…

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 twenty 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 fifteen 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 fifteen working days.⁶

If you are 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.

What Arbitration Process Does the Equity Release Council Offer for Unresolved Complaints?

The arbitration process for unresolved complaints is relatively straightforward. 

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 is shared equally between the homeowner and the ERC member.

How to Become a Member of the Equity Release Council: The Process Explained

To become a member of the Equity Release Council, applicants must meet strict criteria, adhere to the Code of Conduct, and commit to protecting consumer interests.

What is required…

What Are the Membership Criteria for the Equity Release Council?

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.

What Is the Application Process and Timeline for Equity Release Council Membership?

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 complete it 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 four weeks, depending on the nature of the application.

Frequently Asked Questions About the Equity Release Council

Summarising the Impact of the Equity Release Council on Consumer Protection

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 is 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.