The Equity Release Council has launched a new guide to help consumers compare fees and charges across different equity release products.
The guide has been developed in consultation with a working group of Council members, including advisers, providers and legal experts, and sets out a consistent way of describing fees and charges throughout the customer journey using clear, simple and standardised language that is easy to understand.
The aim of the guide is to make it easier for consumers to compare between products and their associated costs, as part of the Financial Conduct Authority (FCA)’s Consumer Duty.
The guidance also takes into account the recommendations of the Financial Services Consumer Panel which called for “standardised disclosures of fees and charges”.
All equity release firms are being encouraged to adopt the language outlined in the guide when describing fees and charges to their customers.
The guide outlines the recommended language for all fees and charges, though not all customers will be subject to every charge listed when taking out an equity release product.
Equity release allows older homeowners to access the wealth in their homes while remaining there until they pass away or move into long-term care, without having to make regular repayments.
In 2022, 90,000 consumers took out £6.2bn in equity release via Council members, each backed by robust safeguards that ensure rates are fixed or capped for life at the point of withdrawal without ever facing the risk of repossession.
Jim Boyd (pictured), CEO at the Equity Release Council, said: “The Council’s guidance describes all the fees and charges that could be relevant to an equity release application, depending on its complexity.
“Our aim is to establish a set of standard definitions to help consumers to understand their options as they explore the equity release process with a regulated adviser.
“We hope all firms will take this guidance on board when they next revisit their approach, so it becomes the standard across the equity release market.”
The guide will be available to consumers via the Equity Release Council’s website.
