Which banks do equity release?

Are any UK banks offering equity release?

Written in line with our editorial policy.

You can no longer take out a new equity release plan directly from a UK bank. Instead, it’s most often available from insurance companies or specialist lenders.

If you have been looking into equity release, you may have been surprised to find that banks aren’t offering equity release directly to their customers. In this article, we explain why this is the case by looking at the relationship between banks and equity release:

• Which banks do equity release?
• What type of company is more likely to offer equity release?
• Will my bank be able to help me find an equity release provider?
• Another way to choose the right equity release plan.

We hope this article will help you understand which providers offer equity release. Our selected equity release advisers are also available to discuss your circumstances and offer further information and advice.

Just call us on 0808 178 3055 or request a call back and we’ll arrange a no-obligation appointment with an adviser for you. Alternatively, check your eligibility and get an initial indication of how much tax-free cash you could unlock.

Which banks do equity release?

Currently there is just one UK banking group that offers equity release: Lloyds Banking Group. However, Lloyds Bank itself doesn’t provide it, and it isn’t as simple as popping into your local Lloyds branch.

Lloyds Bank itself DOES NOT offer equity release directly. Instead, Scottish Widows is a part of Lloyds Banking Group and they offer lifetime mortgages, which is the most popular type of equity release. 

The Lloyds group also includes Halifax and Bank of Scotland, so customers of all three banks might be referred to Scottish Widows if they enquire about equity release. 

If you are a customer of Lloyds, Halifax or Bank of Scotland, we would point out that restricting your search for equity release only to Scottish Widows could have its disadvantages. There are other equity release providers, some of whom may be more suitable for your needs than Scottish Widows. You may also find that other providers let you borrow more, or may offer lower interest rates.

It’s worth mentioning another well known name in the UK banking sector. Nationwide Building Society used to offer equity release. However, nowadays they only support their existing lifetime mortgage customers who wish to switch to a new deal or borrow more. As well as a lifetime mortgage option, they also offer these customers retirement interest-only (RIO) mortgages.

What type of company is more likely to offer equity release?

You might have expected all the major UK banks to offer equity release. After all, the most popular type of equity release is a lifetime mortgage, and most banks offer mortgages. So why wouldn’t it follow that they also offer lifetime mortgages?

The fact that banks don’t offer equity release may be surprising or even disheartening. But the good news is that there are several very reputable companies who do offer equity release to homeowners aged 55+.

Equity release providers tend to be insurance companies rather than banks. Many of them are household names including Aviva, LV=, Canada Life and Legal &General. There are also specialist later life finance firms such as Just and More2Life.

Why do insurance companies offer equity release, and not banks?

A lifetime mortgage works quite differently to a conventional residential mortgage offered by banks.

With a lifetime mortgage, you wouldn’t typically pay back the loan through monthly repayments. Instead, the loan is usually repaid through the sale of your home when you pass away or move into long-term care.

For a number of reasons, banks are unwilling or unable to lend the money from their customer’s current or savings accounts on this basis. In contrast, insurance companies are able to invest their annuity funds into equity release. In effect, they are investing in the property market every time they enable someone to release equity from their home.

Will my bank be able to help me find an equity release provider?

As we’ve seen, UK banks aren’t really in the business of offering equity release within their product range. But that doesn’t mean you can’t in theory get equity release through your bank.

Your bank may have an agreement in place where they refer you to an equity release advice firm. If that’s the case, please be aware that the firm may be ‘tied’ to a specific equity release provider. That may suit you, but you may prefer to deal with an adviser who can search for products from a number of providers to help you get a better deal.

Another way to choose the right equity release plan.

Here at Equity Release Wise we can arrange an appointment with one of our selected equity release advisers. They provide an extensive advice and information service in which they will:

• Verify your eligibility
• Check if equity release is actually the best financial option for you
• Search for the most competitive equity release quotations from leading providers
• Explain all the pros and cons of each type of plan you are considering
• Help you decide which plan best suits your unique wants and needs
• Expertly guide you through the application process through to completion

To talk to an adviser, please call 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 unlock.

About Richard Groom. A writer with 20+ years’ experience across several sectors including financial services, Richard has a passion for writing clear and simple content on even the most complex of subjects. In his spare time, Richard loves exploring the hills and mountains of the UK on long walks with his faithful cocker spaniel. Follow Richard on LinkedIn