A study conducted by Equity Release Supermarket (ERS) has revealed concerning inconsistencies in the information provided by online equity release calculators. According to the findings, more than 80% of the data obtained from such calculators could be considered misleading to consumers.
In an era where consumers rely on digital platforms for everything from retail shopping to financial products, the trust in the accuracy of online data is paramount. This study casts doubt on the credibility of the financial tools available to those seeking information about equity release options.
ERS analysed comparative websites that offer online calculators for consumers to gauge how much equity they could borrow. The research was coordinated to assess the accuracy of these tools, comparing them against IRESS, a reputable product sourcing tool for advisers. Three scenarios were considered, including the age of the customer, their property value, and their loan to the value of their property (LTV).
The results are deeply concerning. Over 85% of equity release calculators were found to provide inaccurate information. Almost a quarter of those calculators gave lower LTVs and loan amounts than IRESS and ERS. However, even more alarming was the discovery that more than 63% of the calculators checked provided higher LTVs and maximum loan amounts than IRESS and ERS. Such misleading figures could cause significant confusion, as these products do not actually exist in the market.
One shocking example uncovered by the study involved a calculator indicating that an 85-year-old with a £300,000 property could borrow £192,000, representing a 64% LTV, when the largest loan available at the time of the study was a 50% LTV (£150,000).
Furthermore, the study found that for consumers aged 70+ – 13 in 16 sites reported higher maximum lump sums than would be available to them.
This research comes as ERS is expanding its online offering to provide more accurate and extensive information to consumers. Utilizing inbuilt technology that allows for real-time data pulling, ERS aims to avoid time delays and fluctuations that can lead to inaccuracies.
Mark Gregory, founder and CEO at Equity Release Supermarket, said: “This study was conducted in light of the new Consumer Duty regulations launched this month.
“Our aim is always to support consumers by providing real-time, accurate data, and to help the wider industry through the provision of smartER technology.
“We appreciate that it’s a challenging time for the industry, however it’s important we collectively drive the best possible consumer standards and we’re here to support any equity release firm in achieving that.”
