What is the Equity Release Council?

How strict rules and standards serve to protect your interests

Written in line with our editorial policy.

The organisation which has perhaps done the most for the equity release industry in terms of standards and regulation is the Equity Release Council.

If you are a UK homeowner aged 55 or over, you may be considering equity release as a way to top up your finances and achieve your financial goals. Of course, arranging a plan is a huge financial decision to make. This is why it is reassuring to know that the Equity Release Council has strict rules and standards in place that protect you and your estate. 

In this guide we’ll explain what the Equity Release Council is, and how it strives to promote high standards of conduct and practice across the industry. We will be discussing the following:

• What is the Equity Release Council?
• Who are members of the Equity Release Council?
• How does the Equity Release Council protect someone taking out equity release? 
• What are the Equity Release Council’s guarantees?
• What are the Equity Release Council’s Principles and Outcomes?
• Are there any other protections in place for equity release customers?
• Find out more about equity release.

For fully regulated advice on unlocking your property wealth, please speak to our friendly selected advisers on 0808 178 3055, or request a call back for a time that suits you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could release.

What is the Equity Release Council?

The Equity Release Council is the industry body for the UK equity release sector. It’s an independent organisation committed to protecting the rights of equity release customers. Formed in 1991, it has strict rules that all members must abide by. It also has standards and guarantees that its members must agree to, which include the ‘no negative equity’ guarantee, so you’ll never owe more than the value of home. 

Together with their principles and outcomes, these guarantees ensure a high standard of products for homeowners unlocking equity from their homes. 

Who are members of the Equity Release Council?

Thanks to the Council’s work over the last three decades, the reputation of the brand and the industry as a whole has seen its membership grow quickly. Now, members of the Equity Release Council consist of:

• Providers of equity release plans
• Solicitors
• Intermediaries
• Financial advisers
• Consultants
• Surveyors
• Other industry professionals

All of the above are committed to the Principles of membership, ensuring the safety and protection of equity release customers today and in the future.

How does the Equity Release Council protect someone taking out equity release? 

The Equity Release Council insists that all customers must receive independent face-to-face legal advice before signing up for a lifetime mortgage or home reversion scheme. This is another step in the journey that helps to prevent equity release horror stories from happening.

In addition, their standards for members ensure that all brokers, advisers and providers offer high-quality products and services to customers and act with integrity and transparency.

There is so much that the Equity Release Council does to protect consumers, bring about product innovation and inspire confidence. Here are some examples of their work:

• Provides current and prospective customers with all the impartial information you need on equity release.
• Ensures all members abide by its rules which protect customers and their estates.
• Regularly produces evidence-led market-insights, reports and data for publication to promote awareness of how equity release can be an ideal option for many later life homeowners in financial need.
• Attends government conferences and holds meetings with ministers and advisers to lobby them to effect policy change and promote consumer awareness.
• Works to constantly drive up standards within the sector and share best practice and innovation so equity release customers feel confident with their choice.

You can read more about the work they do in our blog: “How does the Equity Release Council promote consumer awareness?”

What are the Equity Release Council’s guarantees?

The Equity Release Council guarantees ensure that advisers and providers offer products which reflect the best practices of the sector.

In a nutshell, these equity release guarantees mean that all customers will have:

• A no negative equity guarantee
• The right to stay in your home
• The right to sell or move house
• The right to make penalty-free payments
• A cap on interest rates

We explain these five standards in detail here in our blog “What are the five equity release guarantees?”

What are the Equity Release Council’s Principles and Outcomes?

The Council’s strict standards and protections enable customers to trust that equity release is reliable and safe. To ensure these standards are met, all members must agree to abide by its rules, and its Principles and Outcomes.

The Equity Release Council’s ‘Overarching Principles’ require their members to:

• Ensure that all their actions promote public confidence in equity release.
• Act at all times in utmost good faith, with the best interests of their customers being paramount, by treating customers fairly in all their actions.
• Ensure conflicts of interest are identified swiftly and managed fairly.
• Seek to deliver suitable outcomes for customers from initial sale through every point of contact during the life of the product.

The Equity Release Council’s ‘Required Customer Outcomes’ ensure the advice, information and professional services they provide are clear and impartial:

• Products and services offered should suit the customer needs best and be fairly priced.
• Members should seek to identify and provide appropriate support to vulnerable customers.
• Customers should be confident they can live in their own home for as long as they wish, or move to a suitable alternative property, subject to the lender’s criteria.
• Members should ensure customers understand their rights and responsibilities at every point of contact.

These requirements help to ensure consumers are fully informed at every stage of the equity release journey. In this way, homeowners have complete confidence in the product they are exploring and in their decision whether to proceed or not.

Are there any other protections in place for equity release customers?

Equity release customers have the reassurance of other protections and safeguards, too. 

In addition to the Equity Release Council, the following bodies work to protect equity release customers:

Financial Conduct Authority

Anyone offering you advice on equity release, or providing you with an equity release product, must be authorised and regulated by the Financial Conduct Authority.

Firms must demonstrate that they meet a range of requirements. This includes signing up a strict code of conduct and agreeing to the FCA’s stringent standards that protect consumers.

Financial Ombudsman Service

The Financial Ombudsmen Service will handle disputes that cannot be resolved between a business and a customer.

If you do have a complaint and are not happy with the response you receive from the firm, you can then escalate your complaint to the Financial Ombudsman Service, subject to your eligibility. 

Financial Services Compensation Scheme

Should anything go wrong during or after the equity release process, and the firm involved goes bust, homeowners can seek advice and compensation from the Financial Services Compensation Scheme (FSCS).

The FSCS offers protection specific to equity release customers who lose money due to:

• Advice to take out a lifetime mortgage that was unsuitable (for advice given after 31 October 2004) 
• Bad advice about home reversion plans (since 6 April 2007)

You can read more about the Financial Services Compensation Scheme in our guide.

Find out more about equity release

If you are a UK homeowner aged 55 or over then our friendly team are ready and waiting to help you find out more about equity release. 

Call us on 0808 178 3055, or request a call back for a time that suits you, and we will arrange an appointment with one of our selected equity release advisers.  Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could release.

Are you younger than 55 and in need of a cash boost? Read our blog here to explore how to release equity if you are under 55.

About Clare Yates. With over a decade’s experience writing about later life financial planning, Clare offers a wealth of knowledge about equity release, pension annuities, wills, LPAs and more. When she isn’t writing, Clare likes to spend her time baking and going on walks with her husband, two children and their rescue dog. Follow Clare on LinkedIn