What does the Equity Release Council do?
Last updated 26th February 2024 by the SunLife Content Team
4 min read
The Equity Release Council protects consumers in the equity release market. It sets standards for providers and advisers and drives improvements in the sector.
This guide explains the role of the Equity Release Council and the standards that are there to protect you, if you decide to release equity.
Not all equity release providers are members of the Equity Release Council. But many still choose to follow the council’s standards and recommendations.
Visit our equity release page for more about the process and how it could work for you.
What is the Equity Release Council?
The Equity Release Council is a trade body that promotes safe equity release. It works with the UK Government and the Financial Conduct Authority to set standards for equity release schemes and advisors.
Members of the Council include providers, advisers, solicitors, lenders, and surveyors. To join, they have to agree to the standards and Statement of Principles. This makes sure homeowners have all the information they need to decide and can release equity safely.
The mission of the Equity Release Council
The Council’s mission is to safeguard and inform consumers. It aims to ensure you understand how equity release works. And how it could safely provide you with money to fund care, improve your home, support family, or enrich your lifestyle.
The Council also drives innovation in the market. Its mission statement says it works to ‘provide more choice for customers and more opportunity for professionals to help people unlock the value tied up in their homes.’
Visit the Equity Release Council site for more information about its mission, vision, and values.
What does the Equity Release Council do?
The role of the Equity Release Council is to:
- Protect those who are considering, or in the process of, releasing equity.
- Ensure providers and advisers have high standards of conduct.
- Educate people about how equity release can provide access to money in later life.
- Represent members of the Equity Release Council.
Read on to learn more about how the Council achieves this.
Equity Release Council standards
The main way the Council protects you is through the Equity Release Council standards. These help to protect you as you consider equity release options, receive legal support, and take out equity release products.
The standards apply to all Council members, including financial advisers, equity release providers, and solicitors who specialise in equity release. Check the Council’s site to find approved advisers and solicitors.
Most equity release providers are members of the Equity Release Council. Even those who aren't members often follow the Council's standards and recommendations in their equity release offerings.
Here’s how the Equity Release Council standards ensure that you are informed and able to release equity safely.
Providing fair and clear information
Keeping you informed is important to the Equity Release Council. If you take out an equity release product with a Council member, they have to clearly tell you:
- All the costs involved
- The tax implications
- What happens if you want to move house
- How changes in house values may affect your plan
Independent advice
When you apply for equity release, you must speak to an advisor as part of the process. The Council says advisors should discuss your income and expenses, eligibility for state benefits, and all the alternatives to equity release. They must tell you if they think there could be a more suitable option for you.
When you choose a Council-approved solicitor to help with the legal side of releasing equity, the standards ensure you receive the independent legal advice you need.
Your solicitor will talk you through the details of your plan. This includes the rights and legal duties of both you and your provider. Then you’ll sign a document confirming that you understand all the information and want to enter the plan.
Guaranteeing you the right outcomes
All members of the Council must work to deliver the right outcomes for customers. This means that they will:
- Offer you the products and services that suit your needs best and which are fairly priced
- Support customers who may be physically, mentally, or financially vulnerable
- Ensure you can continue to live in your own home or move to a suitable alternative property
- Help you understand your rights and responsibilities
Standards for equity release products
Perhaps most importantly, the Council sets standards that equity release products must follow:
- For lifetime mortgages, interest rates must be fixed. Or, if they are variable, there must be a “cap” (upper limit) which is fixed.
- You must have the right to live in your property for life or until you need to move into care.
- You have the right to move house, as long as the new property is approved by your provider.
- The product must have a “no negative equity guarantee”. This means when your property is sold, and agents’ and solicitors’ fees have been paid, even if there is not enough left to repay the full loan, neither you nor your estate will need to pay any more.
- You have the right to make penalty-free payments (subject to lending criteria) to reduce your amount owed.
When a provider member releases a new product, they must submit a certificate to confirm that the product follows the Equity Release Council standards.
Next Steps
This guide has explained what the Equity Release Council does and the standards that its members must follow. You might find these other articles useful:
To find out more about releasing equity, visit our equity release page.
Want to know more about equity release?
Visit our dedicated equity release hub
The thoughts and opinions expressed in the page are those of the authors, intended to be informative, and do not necessarily reflect the official policy or position of SunLife. See our Terms of Use for more info.