Have you heard about SHIP equity release but are wondering what it is, and if it is still relevant in 2024?

With £6.2bln released in 2022,¹ staying on top of the latest industry information is important.

Luckily, we have done the research for you.

Equity release has changed significantly over the years thanks to SHIP. 

What Is SHIP in Equity Release?

SHIP, or Safe Home Income Plans, is an industry body in the UK that represents the majority of equity release providers.

The primary role of SHIP is to implement safeguards and standards to protect consumers who utilise equity release plans.

SHIP values its commitment to responsible equity release, ensuring that all members provide transparent and fair services.

In 2012, SHIP rebranded as the Equity Release Council (ERC), broadening it’s original remit.

The ERC continues to promote safe equity release practices, providing a set of guarantees for homeowners including the right to remain in their property for life and the assurance of no negative equity.

Equity release in Birmingham: Discover opportunities for releasing equity on your property specifically within the vibrant city of Birmingham.

The SHIP Equity Release Guarantee Explained

The SHIP equity release guarantee can be explained as a code of practice designed to ensure the safety of the equity release industry and it’s investors.

Established in 1991¹, the body is committed to promoting safe home income plans and ensuring the protection of plan holders.

Launched in response to the investment schemes on the market in the late 1980s, which left many older people struggling financially, SHIP was the first trade body to initiate the supervision of home reversion schemes.

SHIP (now known as the Equity Release Council) now represents over 90% of the equity release market².

Equity release providers who follow the SHIP code of practice must abide by the following rules…

• Provide a simple, fair, and complete presentation of it’s schemes.
• All legal work must be performed by a solicitor of the client’s choice.
• Clearly state all costs involved.
• Provide a “No Negative Equity” guarantee. Meaning the homeowner will never owe more than the value of their home.

SHIP members can also guarantee that homeowners have the right to live on their property for life and will receive cash in the form of a lump sum or regular income payments.

Understanding the safety measures associated with releasing equity from your home is crucial to making informed financial decisions.

SHIP Sets Sail

The equity release market saw massive growth from 1965, when the first reversion scheme was launched (now known as Hodge Equity Release), to the late 1980s.

Unfortunately, things took a turn for the worse in the late 80s when new companies on the market launched home income plans which invested the cash taken out. 

These investments were negatively affected by the stock market crashing and interest rates increasing, which caused many people to lose their homes or land in a negative equity situation.

In 1991, home income plans were banned by regulators, leaving equity release with a tarnished reputation.

To save the industry, a new industry body, SHIP, was launched.

Leading equity release providers came together to formulate a resilient code of conduct for the sales and advice process and critical features for safe plans, such as a no-negative equity guarantee.

By 2006, there were already 21 providers following the SHIP code of conduct.

These providers were…

• Allchurches Life
• Hodge Equity Release
• Home & Capital Trust
• GE Life
• Bridgewater
• Norwich Union (now Aviva)
• Northern Rock
• Key Retirement Solutions
• Stroud & Swindon
• Portman
• Mortgage Express
• National Counties Building Society
• Prudential
• New Life Mortgages
• Standard Life Lifetime Mortgages 
• In Retirement Services (Reversions)
• Just Retirement Ltd 
• Bristol and West Mortgages
• Partnership Home Loans
• Retirement Plus 
• Stonehaven Equity Release

Lobbying Power

In 2004, the government decided to regulate lifetime mortgages.

However, there were still no official regulations for home reversion schemes.

SHIP pushed for regulation of both schemes by establishing an influential complaints board and launching it’s own home reversions code to protect consumers.

The lobbying was a success, and as of April 2008, home reversion schemes were formally regulated.

Rise of Professionalism

In 2007 SHIP announced that it would only be accepting business from advisors with the correct equity release qualifications.

Determined not to compromise its stance on providing the highest quality consumer protection, it later (in 2008) decided that it would no longer accept business from advisers without a home reversion qualification.

SHIP Relaunches as the Equity Release Council

In 2012 SHIP relaunched as the Equity Release Council (ERC)³ and expanded it’s membership from equity release providers to advisors, lawyers, intermediaries, surveyors, and other interested parties.

All aspects of equity release advice are now covered by the council, which is committed to consumer education and protection.

The Equity Release Council’s role…

• Represent members across the equity release industry, from lenders to firms and individual financial advisers, solicitors, and surveyors.
• Promote a high standard of conduct and practice among equity release providers.
• To protect the interests of homeowners either considering or in the process of releasing equity.
• To ensure that the process of releasing equity is better understood.

The ERC hopes this rebrand will help promote the sector and educate consumers considering releasing equity from their property.

Common Questions

In Conclusion

SHIP (now known as the ERC) is a trade body promoting safe home income plans and protecting equity release plan holders.

If your selected provider is a member of SHIP (or ERC), it must abide by certain minimum standards in terms of the advice it gives you and it’s product’s terms.

Now that you know what SHIP is, you can see why choosing an equity release provider with a SHIP (now ERC) membership, is not only a safe decision but the only decision.