Equity Release Council chairman Nigel Waterson has reluctantly given providers the green light to develop non-standard products.
Equity Release Council chairman Nigel Waterson has reluctantly given providers the green light to develop non-standard products.
Currently equity release products typically have a no negative equity guarantee which makes them more expensive but ensures customers won’t lose their homes.
After previously refusing to budge on protections like the guarantee Waterson conceded there might be room for some products without all protections in place – but only if the process is transparent.
Waterson said: “it’s inevitable there will be these products emerging and there will be a market for them.
“We need to be clear that our standards say but if people are properly advised to give up some of these protections then so be it.”
Last month Key Retirement technical director Dean Mirfin revealed discussions were in place with the Council of Mortgage Lenders and the Building Societies Association about releasing a split equity release and interest-only product. The ERC has also been involved with discussions to boost equity release uptake along with the Treasury.
Waterson added: “We are concerned about future proofing products sold by our members but also future proofing individuals.
“If somebody goes into an arrangement in their 50s they might think we don’t need a no negative equity guarantee but things could look different in their 70s.
“I don’t think we can stop hybrid products coming to market but people need to be careful what they are getting and not getting.”
Waterson also revealed he is optimistic regarding housing wealth finally being included in the Pension Wise service after receiving backing from the Work and Pensions Committee.
He added: “I’m sure we will get at least one question in about housing wealth which will be something like ‘have you considered using your housing wealth?’."
