What Is SHIP?

Who Is SHIP & What Role Do They Play in Equity Release?
Contributors: Nicola Date, Katherine Read. Edited by Rachel Wait & Reviewed by Francis Hui
Do You Want to Know What SHIP Is? Learn All about Their Equity Release Guarantee, the History behind SHIP & the Massive Impact They’ve Had on the Industry Here.

Are you considering equity release but not sure if it’s safe? 

Have heard the name SHIP but pondering what is SHIP?

Did you know there is a council dedicated to looking after YOU, the consumer?

The SHIP code of conduct means that any equity release provider member of SHIP must abide by the rules designed to protect you!

As experts in our field, we discuss the following in this article:

    Equity release has changed significantly over the years thanks to SHIP, which introduced higher levels of safeguarding and strict codes of conduct that providers and advisers must adhere to. 

    Our equity release panel takes a closer look at this trade body and the effect they’ve had on the industry. 

    This is what they uncovered.

    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 its investors.

    SHIP is short for Safe Homes Income Plans.

    Established in 1991, the company 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 regulation of home reversion schemes.

    SHIP now represents over 90% of the equity release market.¹

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

    • Provide a simple, fair, and complete presentation of their 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.

    SHIP Sets Sail

    The equity release market saw massive growth from 1965, when the first reversion scheme was launched by Home Reversions (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 take out. 

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

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

    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 
    • 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 their own home reversions code to protect consumers.

    Their 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 their stance on providing the highest quality consumer protection, they later (in 2008) decided that they would no longer accept business from advisers without a home reversion qualification.

    SHIP Relaunches as the Equity Release Council

    In 2012 SHIP was relaunched as the Equity Release Council (ERC)² and expanded its membership from equity release providers to advisors, lawyers, intermediaries, surveyors, and other interested parties.

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

    The Equity Release Council’s job is to do the following:

    • 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

    What Does SHIP Stand For?

    Are SHIP & the ERC the Same Thing?

    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, they have to abide by certain minimum standards in terms of the advice they give you and their products’ terms.

    So, if you are considering committing equity release, choosing a scheme provider who abides by these rules is crucial, and now you know what SHIP is and how important they are.

    Editorial Note: This content has been independently collected by the EveryInvestor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.