The Equity Release Council has responded to critics of product rates.
Speaking at the Retirement Planning Summit today, Nigel Waterson, chairman of the Equity Release Council, said: “The improving health of the property market is excellent news for homeowners who will have more equity to draw on in later life. But experience shows the market is not immune to change and just this week the Building Societies Association warned against the risk of another house price bubble.
“Providers of equity release are unique in protecting consumers from ever falling into negative equity. This is just one of the safeguards which exist thanks to SHIP’s efforts to watch over customers and set high standards for the industry over the last 20 years. Other provisions include clear customer information, a fully informed sales process involving independent financial and legal advisors, and a guarantee that people can remain in their home for the rest of their lives or until they move into residential care.
“To protect the customer, equity release providers take on a higher level of risk which is exactly why the available rates for lifetime mortgages are slightly higher than typical homeowner mortgages.
“For an increasing number of people, equity release can make the difference between a worrisome, cash-strapped retirement and one rich in activities and interests. This is borne out by stellar satisfaction levels and a low level of complaints.
“Hugely respected organisations like Age UK and Saga are comfortable offering equity release products – and the potential arrival of other household names in the market promises even greater choice, competition and innovation to benefit consumers.”