David Burrowes

Equity Release Council launches legal guide and report on customer vulnerabilities

The Equity Release Council has launched a Legal Guide to Equity Release and a new report, “Vulnerability Vigilance,” which explores common customer vulnerabilities encountered by legal advisers. This initiative supports the Council’s commitment to maintaining and improving standards in the later life lending sector and the wider legal profession.

The study examined over 300 cases from last year where customers were identified as potentially vulnerable. The research found that health issues (44%) and capacity issues (23%) were the most common vulnerabilities identified during the independent legal advice process. In nearly a quarter (24%) of these cases, more than one vulnerability was identified.

All customers who take out equity release must receive independent legal advice to ensure they fully understand the risks, product details, and implications of their choices. Legal advisers advocate for their clients and, when vulnerabilities are identified, help them obtain the necessary specialist support.

Over three quarters (78%) of cases flagged as potentially vulnerable were able to proceed with additional support. For those cases where it was not possible or appropriate to proceed, capacity and health issues each accounted for 25%, while duress and undue influence accounted for 16% and 10% respectively.

Since 1991, a total of 670,000 customers have accessed £48bn of property wealth via Council members with the benefit of independent legal advice.

To encourage more firms to better support equity release customers, the Council launched its Legal Guide to Equity Release at its Annual Summit in Westminster. This comprehensive document aims to educate legal professionals about their unique role in this market.

David Burrowes, chair of the Equity Release Council, said:

“Independent legal advice is an essential part of the process of releasing equity, and it is vital we have the knowledge and skills in place across the legal sector to reflect and support the modern market.

“Our new guide will help to ensure a common understanding of the role of legal advice and its contribution to ensuring good consumer outcomes. It will also challenge more firms to consider whether they can offer this service to customers and what lessons they might learn from those who already successfully operate in this space.

“Meanwhile, our members’ insights, gleaned from supporting vulnerable consumers, show the benefit of involving specialist legal advice in important financial decisions, particularly in later life when customers can be more prone to vulnerability.

“Equity release can be a transformative financial product which, when used appropriately, can provide an important lifeline for pensioners, improve living standards and enhance the lives of their families.”

Both the “Vulnerability Vigilance” report and the Legal Guide to Equity Release were produced with support from the Council’s legal forum.

  • To download the Vulnerability Vigilance report, click here. 
  • To download The Legal Guide to Equity Release, click here.