In a white paper entitled Unlocking the potential – the future of equity release, the council offered a number of recommendations to the government in order to address the challenges of an ageing society, while offering equity release as a viable solution for this demographic.
The council warned that government departments and the Financial Conduct Authority needed to be ‘mindful’ of the solutions which equity release can offer for an ageing society, as well as the ways in which government policy can both support and disadvantage equity release.
Among its recommendations, the council has called on the government to consider how equity release can be used to help people pay for home care. It also recommends the government to expand its scope of the Pension Wise service, so users can understand how accessing housing wealth may provide solutions to satisfy their objectives.
In terms of assigning a government department to take care of equity release, the paper said that the Treasury’s oversight of other departments as well as its responsibility for financial services made it the natural home for the product.
Andrea Rozario, chief corporate officer at Bower Retirement Services, welcomed the council’s call for government recognition of equity release.
“To maintain the momentum [of the equity release market] there is a real need for more competition and innovation in the plans available to meet the needs of homeowners, but equally government can play a more active role in highlighting the useful role of equity release in the many aspects of funding retirement not least the cost of care.”
“But the key to it all is highlighting the role of independent specialist advice and the Financial Advice Market Review is a real opportunity to make the case.”
Another key recommendation proposed by the council asks for the FCA’s upcoming review of the market to be wide-ranging and consider the impact of regulatory framework, as well as other potential barriers to expanding the market.
Dean Mirfin, technical director at Key Retirement, said increased competition, product innovation and advice were all crucial elements that could drive the growth of the industry further.
“Average equity release customers are able to unlock in excess of three times the average defined contribution pension pot from their housing wealth to boost retirement income which highlights the contribution that property wealth can make to standards of living in retirement and why it is important that the industry, regulators and government does all it can to support further development in the market.”
