- The Equity Release Council has continued to make great progress in achieving mainstream media visibility. Between 2016 and 2017, national media coverage for The Council increased by 59% and this growth has accelerated even faster in 2018. As of the first week of July, The Council has been mentioned in the national media more times in the first half of this year than during the whole of 2017 (150 in H1 2018 vs 146 in 2017), with 90% of national coverage showing a positive sentiment towards equity release and only 1% negative (rather than neutral).
- Our PR liaised with Ali Hussain at The Sunday Times on the subject of RIO mortgages and the uses of equity release. Continued conversations were had with several journalists at the Daily Telegraph to provide commentary and data for articles throughout Q2, including Sam Barker, Adam Williams, Sam Brodbeck and Harry Brennan. The Council’s continued relationship building with national journalists has resulted in balanced and positive coverage, including a standout piece in the Daily Telegraph which stated that “equity release has become mainstream”.
- David Burrowes’ media briefing programme continued throughout Q2, speaking with Vicky Hartley, Mortgage Solutions and Tom Knowles, The Times as well as having a profile interview with Duncan Wood from the Law Society.
- In April our PR provided feedback and data to MoneySavingExpert for an article on equity release. Following this, we provided briefing information to Martin Lewis for his appearance on ITV’s This Morning to discuss equity release. On the program he quoted Council information and urged viewers to use The Council’s services.
- In June David Burrowes was interviewed by Howard Mustoe, producer at BBC Radio 4, and The Council engaged with members and industry stakeholders on various queries relating to the BBC’s upcoming standalone equity release programme which will be aired over the summer.
- David Burrowes and Donna Bathgate attended a meeting with Vicky Hartley and Ian Cartlidge of Mortgage Solutions / AE3 Media to discuss a potential new category for this year’s Equity Release Awards.
- July saw the appointment of Jim Boyd to CEO. The announcement achieved strong coverage and was featured in The Times, Daily Mail, This is Money and City AM, alongside coverage in key trade publications. Jim was chosen to appear in The Times’ ‘City People, Big Shot’ feature, in both print and online, while the Daily Mail featured the announcement on the first page of its City & Finance section, under the heading of ‘incoming expert’.
- The recent Equity Release Council Parliamentary Event was attended by journalists Sam Barker, Daily Telegraph; Vicky Hartley, Mortgage Solutions; Will Kirkman, This is Money and Annie Shaw, Saga Magazine.
Public Affairs
Parliamentary events
In July, the Council hosted Parliamentary events including a Committee Room discussion on social care and a reception themed around intergenerational issues. At the first event, we heard from former First Secretary of State, The Rt. Hon. Damian Green MP, former Cabinet Minister, The Rt. Hon. Dame Caroline Spelman MP, the Council’s new Chief Executive Jim Boyd, Jacqueline Berry a founding director of My Care Consultant, Stephen Lowe, Group Communications Director for Just, and many more interesting contributions from the floor.
Damian Green, in particular, identified that public policy has not kept pace with the huge demographic changes in our society, with people living far longer and the population of those requiring long term care growing. This means that older people will stay in their homes longer, which it was felt will improve both the length and quality of their lives.
At the summer reception, the Council heard from Economic Secretary to the Treasury, John Glen MP, who made clear the imperative role he sees equity release as having and the importance of the sector as it continues to grow. Mr Glen thanked the Council and its members for the industry’s efforts in ensuring sector growth is carried out safely and responsibly, with consumer interest at heart.
Treasury Select Committee – Solvency II
Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive officer of the Prudential Regulation Authority, Sarah Breeden, Executive Director, International Banks Supervision, Bank of England, and David Belsham, External Member of the Prudential Regulation Committee gave evidence before the Treasury Select Committee in July, on the work of the Prudential Regulation Authority.
Ahead of the meeting, the Council engaged with MPs and committee members including Nicky Morgan (Chair), John Mann (Vice Chair) and Stephen Hammond, providing the Treasury Committee with a letter and briefing.
In the evidence session, Stewart Hosie, Member of Parliament for Dundee, asked the attendees about Solvency II and referred to a letter from Equity Release Council’s Chairman, David Burrowes. Hosie referenced the technical error relating to the matching adjustment “[which] leads to excessive prudence, and for insurers holding ERMs, an allowance for risk equivalent to assuming a 25-30% immediate fall in property and no recovery” with the requirements of CP13/18 putting UK insurers at a disadvantage to European counterparts.
Responding to this, Wood acknowledged that the PRA sees equity release playing an important role in the future. However, he also highlighted the risk they see to the sector as a result of the no negative equity guarantee, with the risk that this measure exposes the market to risk when faced with house price inflation.
However, Hosie responded strongly saying that the matching adjustment is not market consistent and that he and the Committee were frustrated that, despite industry calling out the regulators and highlighting that industry has been widely critical of the matching adjustment and that it is not market consistent, nothing had been done to address this. Woods however defended the proposed calibration by the PRA saying that it was “in line with industry”.
The full dialogue relating to equity release and Solvency II can be found here.
Stakeholder engagement
During the last quarter, the Council has delivered presentations on the opportunities and growth of the equity release market at various events including the National Later Life Adviser Conference and Society of Licensed Conveyancers spring roadshows.
The Council continued to actively engage with government and regulators, providing background on equity release to HM Treasury officials ahead of its Home Finance Forum in June and as part of the department’s research into the potential impact of retirement interest-only (RIO) mortgages. The Council also briefed Crispin Blunt MP ahead of the Commons debate on the forthcoming Single Financial Guidance Body in April. Mr Blunt proposed an amendment for the new body to provide guidance on liquid and illiquid assets.
The Council also participated in the initial meeting of the FCA’s working group on helping customers find the right mortgage (eligibility), related to its mortgage market study (see below).
Mortgage Market Study: interim report
The FCA published its Mortgage Market Study interim report at the beginning of May, with its key findings on lifetime mortgages published in Annex 5. The FCA found that generally the lifetime mortgage market was working well, although recognising the relative complexity of such products, the FCA is exploring ways to remove barriers that could prevent consumers from accessing the tools they need to take out the most suitable product. The Council will be responding to the report and would welcome input from members by Thursday 26 July. Please contact Sean Smith, Head of Public Affairsif you would like to contribute to the Council’s response.
Retirement Outcomes Review
The FCA set out its proposed package of remedies from the Retirement Outcomes Review at the end of June. The report highlights that while pensions freedoms have presented greater opportunities, consumers need increased support and protection to achieve better outcomes.
Adult social care
Building on the Council’s previous engagement with Whitehall, as well as the recent Parliamentary event on adult social care, we are setting up a stakeholder expert group to develop policy proposals on how equity release can play its part in meeting the challenge of funding adult social care. If you would like to be a part of this group, please get in touch via Sean Smith, Head of Public Affairs.
The Housing, Communities and Local Government Committee published its report on adult social care in June. The Council met Committee Chair Clive Betts MP earlier in the year and will continue to engage with the committee.
