Older debtors can now receive direct help from the Consumer Credit Counselling Service (CCCS), the debt charity, which is launching a new subsidiary offering equity release without fees to clients in need.
Until now, CCCS has referred clients who might benefit from equity release to a panel of advisers. From 2010, it will advise clients directly, having received authorisation from the Financial Services Authority.
In recent years, CCCS has seen a steady increase in the average age of clients coming to it for help with debts, with the proportion of clients aged 60 and over doubling from 5% in 2004 to 10% in 2008. These clients tend to have higher debt levels and regularly undergo income fluctuations due to changes in circumstance, illness or retirement. Many are asset rich but cash poor and the only way they can realistically pay off their debts is by releasing equity locked in their property.
In the medium term, CCCS sees the need to transform the equity release market by creating a new model product. It will launch a study group to come forward with recommendations.
CCCS Equity Release claims to have three distinguishing features from the rest of the sector. First, there is no fee for advice to CCCS clients secondly, its advisers are paid by means of salary with no commission, sales bonuses or sales targets and thirdly, there is a detailed advice process and personal recommendation report to ensure its clients understand the implications of equity release.
Malcolm Hurlston, CCCS chairman, said: “The generation which cut its teeth on the credit card has reached retirement age with higher debts than previous generations. Thanks to the increase in home ownership
