Equity Release 'misunderstood'

56 per cent of Brtions do not understand what equity release is, according to Norwich Union, reports Mortgage Introducer (7/7/07).

Research undertaken by the firm, which surveyed over 1,000 adults, revealed that over half of respondents did not know what equity release was. 80 per cent were unsure of the age eligibility for equity release, while 38 per cent were unaware that equity release policies could affect state benefit entitlements.

28 per cent of consumers were unaware that equity release was regulated by the Financial Services Authority, while 36 per cent believed that plans would ensure they were protected from negative equity in the event of a housing market downturn.

Elizabeth Boardall, head of marketing at Norwich Union Post Retirement Products, was surprised by the findings. “It is worrying that so many people are unaware of the basics of equity release when this may be a viable option for many approaching retirement.

Providers and mortgage intermediaries alike have a role to play in ensuring that consumers fully understand the products available and the options open to them.”

Jon King, chief executive of Safe Home Income Plans (SHIP), said: “This news comes as no surprise to me, and is exactly the reason why SHIP is expanding its activities to get the message across that equity release is cheaper and more flexible than it has ever been.”

SHIP announces future plans

Safe Home Income Plans (SHIP), the trade body for equity release providers, has announced the results of a strategic review into its future direction, reports Mortgage Solutions (21/6/07).

SHIP has decided to expands both its resources and activity significantly, and is to appoint a full-time director general, who will focus on developing the trade body’s strategy, liasing with a range of stakeholders in the equity release industry and communicating with the media. Once appointed, the director general will work with two new SHIP boards – a main board of SHIP members who will make decisions regarding the direction of SHIP’s activity, and a new management board which will manage the execution of decisions from the main board. SHIP’s current home reversions and lifetime mortgage boards will be incorporated within the management board. It is hoped the new director general will be operational by January 2008.

Laurie Edmans, non-executive chairman of SHIP, commented: “The decision to appoint a new full-time director general represents a real advance for SHIP. It highlights the united desire of SHIP members to increase activity within the equity release market whilst continuing its positive work to raise standards of advice for customers and IFAs.”

Jon King, chief executive of SHIP, added: “SHIP has come a long way since its early days in 1991 and the member’s decision to appoint a full time director general only serves to prove this. With a dedicated management board and increased resources SHIP will be in the best position possible to push for further advancements in the equity release industry.”