In March, the Council produced a new guide to help consumers better understand and compare fees and charges across different equity release products.
The guide sets out a consistent way of describing fees and charges throughout the customer journey using clear, simple, and standardised language that is easy to understand. Its content has been informed by a working group made up of Council members including advisers, providers, and legal experts.
All equity release firms are being encouraged to adopt the language outlined in the guide when describing fees and charges, to make it easier for consumers to compare between products and their associated costs.
The guide outlines the recommended language for all fees and charges, though not all customers will be subject to every charge listed when taking out an equity release product. A version of the guide is also available to consumers via www.equityreleasecouncil.com/consumers
The aim of the guidance is to support better consumer understanding which is one of the key objectives of the Financial Conduct Authority (FCA)’s Consumer Duty. Current FCA rules require all fees and costs to be clearly outlined to customers before and during the application process. Council standards also ensure all customers receive independent legal advice, alongside regulated financial advice, to ensure they understand the costs, risks, and benefits associated with equity release.
Since March 2022, all new customers who took out plans that meet the Council’s standards can make voluntary penalty-free repayments, which can prevent the interest from compounding and enable people to pay down the capital.
Download the guidance here
