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Equity Release Schemes

It is a particular pleasure to speak for the first time under your illustrious chairmanship, Sir Nicholas, and an honour that I did not think would befall me in Parliament. I am delighted to have the opportunity to discuss equity release schemes and their regulation. I would like to thank the numerous people and organisations who contacted me to offer assistance and information, and I congratulate the Consumers Association on its recent Which? report. It seems to have ruffled some feathers in the financial industry, particularly among some providers, but it offered an objective study and a warning to anyone who is tempted by the often inappropriate marketing of such products. The products are aimed mainly—I shall touch on that later—at the retired or soon to be retired, and fall into two main types. With lifetime or roll-up mortgages a loan is secured against the home and interest is charged, but not collected until the borrower dies or goes into care and the property is sold. With home reversion schemes the provider takes a share or all of the property in return for a lump sum, the owner continues to live in the house and when it is sold the provider takes its share of the property at the full market price.