Who Are The Equity Release Council?

If you’re thinking about taking an equity release loan, you should only proceed with an application if your lender or broker is registered with the Equity Release Council (ERC).

The ERC’s guidelines are designed to look after consumers and provide a minimum guaranteed service level to protect you.

What Do the Equity Release Council Do?

The Equity Release Council is a trade-funded body made up of 90% of the UK's equity release lenders and brokers. They provide guidelines designed to protect customers and lenders, and the integrity of the market.

Read on to find out more about the Equity Release Council.

Looking for other information on Equity Release? This guide has info on 'Who are members of the equity release council?' We have also written extensively about:

• - Are equity release schemes are regulated by FCA?
• - Who is equity release good for?
• - Why is equity release tax-free?
• - Does equity release affect my pension credit?
• - Will equity release be affected by Brexit?

We update all our guides regularly. If you are researching Equity Release and we haven't got an exact guide that helps you, keep coming back as we update daily.

What Is the Equity Release Council?

The Equity Release Council is a trade-funded body that is designed to look after customers. This means they aren’t independent but are funded and managed by lenders and brokers, but this needn’t be a concern – they set high standards to ensure all companies offering equity release meet certain minimum standards to protect the integrity of the market.

As well as establishing these standards, the Equity Release Council also monitors the activity of the market and produces regular Equity Release Market Reports.

Key stats:

• There are over 300 member firms and 1,000 individuals registered with the Equity Release Council
• Since 1991, over 487,000 homeowners have taken an equity release scheme loan with a registered council member, accessing £28 billion in equity value

How Do I Know if a Lender Is Part of the Council?

It’s really easy to check whether a lender is part of the Equity Release Council, as they have a simple search tool on the website. Equity Release Council search tool.

They include advisers, who you’ll need to speak to in order to get formal financial advice before you apply, and lenders who will ultimately give you the money you need. You can also search for an equity release solicitor that you’ll need as part of the application process, as well as Associates and Affiliates who you may not need to deal with directly but who will have a stake in the equity release market.

What Does Being a Member of the Equity Release Council Guarantee?

Members of the Equity Release Council sign up to a code of conduct that ensures consumers are treated fairly. Much of this is centred around ensuring that the strict rules of the Financial Conduct Authority are followed and give guidance on best practices.

For example, the ERC guidelines on vulnerable customers help firms to easily follow FCA rules on only offering equity release when it’s suitable for the customer. The ERC helps to define what vulnerability means and includes anyone struggling with low literacy, numeracy or language skills, anyone going through bereavement or relationship breakdown, mental illnesses, coercion from a third party or simply just loneliness or lack of support.

As well as generally ensuring the standards of equity release lending are high, there are also several key features that aren’t guaranteed by the FCA but must be in place in order for a lender to quality to be on the Equity Release Council.

By choosing an equity release loan with a council member, you know you have these protections in place.

Equity Release Council No Negative Equity Guarantee

The first of these is a ‘no negative equity’ guarantee. This guarantee ensures that no matter how long you live and the interest your equity release loan accrues, you’ll never be liable for more debt than the value of your property. Simply put, when you die or move into care and your home is likely sold to clear your debt, the lender must accept as a maximum the full value of the sale after fees and consider its debt fully repaid, even if you’d built up a much higher amount owed.

Under no circumstances should you ever apply for an equity release loan where you don’t have this guarantee in place, or you could end up leaving your family owning money on your behalf.

The other guarantee put in place ensures that, should you wish to move home after you’ve taken our your equity release loan, you are permitted to transfer your scheme to your new property.

That means that if you chose home reversion, where you sell all or part of your property, this can be moved onto your new home at terms that are equivalent to if you had taken out the home reversion on your new home as if you were a new customer.

Equity Release Lifetime Mortgage Customer

And if you’re a lifetime mortgage customer, when you move home you must be allowed to move your loan to the new property with no rise in interest. If your new home isn’t worth as much, and you need to make a partial repayment, that amount must be limited again so that the amount remaining would be how much you would owe if you took out the scheme on the property as a new customer.

You can view the full list of guarantees of service provided by the Equity Release Council, including how they provide guidance on valuations, communications and more.

How Do I Complain if I Feel I’ve Been Mis-Sold Equity Release?

If you feel that the equity release scheme that you were sold isn’t fair, either because the company hasn’t followed the guidelines it signed up to with the Equity Release council or because they aren’t a part of the ERC, you may be able to complain.

The first thing you should do is contact the lender or broker directly to submit your complaint. If they send you a response you aren’t happy with, or they ignore you, you can elevate your complaint to the Financial Ombudsman Service. The financial Ombudsman is an independent body that looks into customer complaints across the financial sector.

The Ombudsman will then begin their investigation, and they will use the guidelines set out by the Equity Release Council in their judgement. If they find that the lender or broker hasn’t followed the standards established by the ERC then they may uphold your complaint.

If they do, then there are three potential courses of action that they can implement:

• They may force the lender or broker to pay you a sum as compensation, as an apology for any inconvenience or distress you may have suffered
• If you were charged an early repayment fee that was erroneous, this may be refunded and, depending on circumstances, you may also get interested back on this charge
• If the Ombudsman determines that equity release wasn’t the right solution for you but the advice you were given led you down the path, then the Ombudsman can force the lender or broker to reimburse you to put you back in the financial position you would’ve been in had you been given the right advice – ensuring you haven’t lost out.

If you feel that you or your loved ones have been mistreated or taken advantage of, the Financial Ombudsman could help. However, they cannot solve everything if you’ve neglected the advice given or not researched your chosen product sufficiently.

Make sure you understand the loan you’re being offered and that you have the protections in place that you would expect before you sign your agreement.

In Summary

You should only ever apply for an equity release loan once you’ve confirmed the lender is a member of the Equity Release Council. If not, you could leave yourself open to serious financial consequences, and your family could be saddled with debts that they cannot afford to pay. Find out more about how equity release works by browsing some of our further guides.

How Can Money Savings Advice Help You With Releasing Equity?

Here at Money Savings Advice, we have partnered with some of the UK’s leading Equity Release brokers. They have already helped thousands of people get the best Equity Release deal and they can do the same for you.

Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.

If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.