Britannic Retirement Solutions has called for full regulation of the equity release market, and criticised the sector’s lack of a trade body, which it feels is detrimental to consumers.
Britannic has called for the Financial Services Authority (FSA) to regulate the equity release market, and said that the only formal body in the market, Safe Home Income Plans (SHIP) offers no monitoring, enforcement or compensation processes.
Bob Bullivant, corporate development director at Brit-annic Retirement Solutions, said: ‘There is an urgent need for the regulator to take control of this sector. The market for this kind of product is potentially enormous ‘ but we want to ensure no-one is disadvantaged or caught out by unscrupulous players.
‘If a pensioner is sold the wrong scheme under the present set-up, they might be on their own and not have access to a compensation or monitoring scheme,’ he said.
However, Jon King, chairman of SHIP believes: Britannic Retirement Solutions has the wrong impression of the role of SHIP, which is merely an organisation offering a minimum standard for equity release plans, according to .
King said: ‘We are not a regulator or a trade body, which is where Britannic Retirement Solutions has got it wrong. Our role is to set up a set of minimum product standards. We have also lobbied the FSA and the Treasury to consider regulation of all equity release.’
He added: ‘The FSA is not going to regulate reversion business, that has been made quite clear by the FSA, so SHIP is more important now than it has ever been.’
The FSA will be regulating mortgage-based equity release plans, but will not regulate home reversion plans, as they are not considered to be financial products.
Reversion plans essentially sell a proportion of the home’s equity to a plan provider, as opposed to taking out a lifetime mortgage on it.