Did you know the Equity Release Council oversees a UK market that soared to a record-breaking £6.2 billion in 2022?¹

In this article, we will demystify who the Council is, delve into its significant role within the UK equity release sector, and walk through the standards it upholds.

From understanding how complaints against Equity Release Council members are managed, to the steps involved in becoming a member, we are committed to being your trustworthy guide. 

So, if you are considering unlocking your property value or thinking about joining the Council, you have landed on the right page.

What Is Equity Release In The UK?

UK equity release is financial strategy allows you to release equity from your home, providing a solution for those seeking additional funds during retirement.

What Is the Role of the Equity Release Council in the UK?

The Equity Release Council (ERC) in the UK serves a crucial role in overseeing the equity release sector, ensuring that both consumers and industry professionals adhere to relevant regulations.

As a self-governing body, the ERC establishes and enforces stringent standards of conduct, providing safeguards for homeowners and instilling confidence in the equity release products.

Beyond regulation, the ERC also plays a pivotal part in educating and informing the public about the possibilities and risks associated with equity release.

They produce in-depth guides and offer resources to help individuals make informed decisions.

As a result, the ERC acts as both a watchdog and a trusted advisor in the equity release sector.

Who Is the Equity Release Council?

The Equity Release Council (ERC) is the industry body for the equity release sector in the UK. 

Founded in 1991 as Safe Home Income Plans (SHIP), it was renamed the Equity Release Council in 2012.² 

The ERC strives to protect and secure the financial well-being of individuals utilising equity release, aiming to ensure that all actions in the sector are conducted transparently, responsibly, and to the highest professional standards.

The History

SHIP was created to enhance the safety of equity release plans and safeguard consumers' interests. 

It was later rebranded to represent the growing market better and increase transparency. 

The rebranding marked a significant expansion in the scope of the organisation, which now extends beyond providers to include advisers, solicitors, and surveyors - all vital players in the equity release process. 

Over the years, the Council has played a central role in steering the evolution of the UK's market, setting high standards of conduct, championing consumer protections, and advocating for industry transparency. 

Today, the organisation stands as the industry-standard bearer, driving ethical practices within the market and reassuring consumers nationwide.

Read On: Equity Release Council Solicitors

The Present and Future

Today, the Council remains a central figure in the UK's expanding equity release market. 

With an ageing population³ and a rising demand for flexible retirement financing options, its role has become more critical than ever. 

It continues to advocate for best practices, encourage consumer protection, and strive for transparency within the industry. 

Looking ahead, the ERC is likely to face new challenges and opportunities as the market evolves in response to economic changes, regulatory developments, and shifts in consumer behaviour. 

It is anticipated that the Council will continue to adapt, enhancing its standards and guidance to accommodate these changes while ensuring that the equity release market remains a safe and viable option for consumers. 

Moreover, the ERC is expected to play a crucial role in educating consumers and industry stakeholders, debunking myths, and promoting understanding of this complex financial product, thus shaping the future of the UK industry’s landscape.

What Is the Role of the Equity Release Council in Equity Release

The Council is integral to the UK's equity release market, setting strict standards to ensure all schemes are transparent, ethical, and consumer-friendly. 

They vigilantly monitor adherence to these standards, fostering consumer confidence in the market's integrity.

Furthermore

The ERC promotes safe and innovative equity release products while educating the public on their potential benefits and risks. 

Lastly, the Council also provides a robust mechanism for addressing consumer grievances against providers, ensuring fair and timely resolution. 

Understanding the Code, Rules, and Standards of the Equity Release Council

The codes, rules, and standards set out by the Equity Release Council are in the interest of the consumer and include essential safeguards like the necessity for fixed or capped interest rates.

Here is a breakdown of each of these:

• Stay at Home: Customers have the assurance to reside in their properties until there is a necessity to move into long-term care, on the condition that they maintain the property as their primary dwelling and meet all contractual obligations.
• Fixed or Capped Interest Rates: In the scenario of fluctuating interest rates, there is a safeguard in place to ensure a maximum limit throughout the loan's duration.
• No Negative Equity Guarantee: In the aftermath of a property's sale, once all professional fees have been deducted, should the net amount fall short of the loan's balance, this protective clause ensures neither the customer nor their successors bear any additional costs.
• Voluntary Repayments: Newcomers using equity release can confidently make repayments without facing any punitive charges, in line with established lending guidelines.
• The Right to Move: There is flexibility for customers to transition to a different home, contingent upon the product provider's approval of the new home as a sustained guarantee for the loan.

Identifying the Members of the Equity Release Council

You can identify a member by searching the Council’s website⁵ or finding their logo on the equity release company’s website.

The Equity Release Council brings together a broad spectrum of organisations that operate in the UK's market. 

This includes financial advisers who guide consumers through the process, equity release firms that offer these financial products, solicitors, and intermediaries who connect consumers and lenders.

High-profile members, such as: 

• Aviva
• Legal & General Group plc
• More2Life ltd

These are just a snapshot of the Council's diverse membership. 

The ERC also comprises many smaller firms and independent advisers, reflecting the breadth and depth of the UK's sector. 

How Are Complaints With Council Members Handled?

The ERC takes all complaints against its members very seriously. 

Initially, the Council encourages direct communication between the customer and the member involved. 

If this does not resolve the issue, the customer may lodge a formal complaint through the Council, which will investigate the matter thoroughly.⁶

If a complaint cannot be resolved satisfactorily through the Council's complaint process, it may proceed to arbitration. 

This involves an impartial 3rd party, the arbitrator, examining the details of the dispute and making a legally binding decision for both parties.

Joining the Equity Release Council

Becoming a member of the ERC comes with various benefits, including access to industry updates, networking opportunities, and the chance to influence policy. 

It also signals to customers that you adhere to the highest professional standards in the equity release industry.

A company looking to join the ERC must work within the equity release market and demonstrate a dedication to meeting strict rules and quality standards. 

Joining the Equity Release Council is a straightforward yet thorough process.⁷ 

It begins with completing an application form. 

This form is designed to gather key details about the applicant, including their business operations, services, and commitment to uphold the ERC's standards of conduct.

Alongside this form, applicants are required to provide supporting documentation. 

This can include evidence of relevant qualifications, proof of regulatory compliance, and documentation of their professional track record.

Once the application form and supporting documents are submitted, they are thoroughly reviewed by the Council. 

Most importantly

The ERC assesses the applicant's ability to meet their strict standards, including adherence to the Council’s rules, code of conduct, and best practice guidelines. 

If the application is approved, the firm becomes an official member of the ERC. 

Common Questions

Conclusion

In conclusion, understanding the role of the Equity Release Council is crucial for anyone interested in, or currently involved with, equity release schemes in the UK. 

The body plays a pivotal role in protecting consumers, advocating for industry improvements, setting high standards, and encouraging innovation in the market. 

Whether you are a consumer looking to understand your rights and options, a professional considering membership, or simply a person curious about the sector, it is a key source of information, guidelines, and reassurance. 

Ultimately, the Equity Release Council serves as an indispensable ally for anyone navigating the intricate landscape of equity release.