Extensive overhaul also planned for later in the year
The Equity Release Council (ERC) has introduced updates to its standards, alongside a comprehensive review aimed at bolstering consumer protections within the later life lending sector.
Following a period of consultation with stakeholders and members, the council has introduced some initial modifications to the standards, with plans for a more extensive overhaul scheduled later this year.
The initial set of updates is set to take effect from March 1, aimed at enhancing product flexibility and consumer choice. A noteworthy addition is the new standards for Mandatory Payment Lifetime Mortgages, aimed at providing customers with greater protections and reassurance.
The updated standards will require advisers to include assessments of income and expenditure as a fundamental part of the advisory process. Although this practice is already widespread, ERC said incorporating it as a mandatory requirement ensures consistency across the board.
“The council’s standards have been vital to the development of a vibrant market, but it is important that we regularly review them and consider how we best serve customers as well as support innovation within this sector,” said Michelle Highman (pictured), chair of the Equity Release Council’s standards committee.
“The council is therefore undertaking a thorough review in 2024 with input from members, stakeholders, and other interested parties. The evolution of our standards is key to helping the market continue to grow and ensure that the diverse customers who choose to access their housing equity can do so with confidence.”
Kelly Melville-Kelly, director of risk, policy and compliance at the Equity Release Council, added that as the market has seen significant innovation and change over the last few years, it is vitally important that the ERC ensures its standards continue to evolve.
“The updates that we have announced today are just a start and we will shortly be launching a wider review and seeking input from members as well as wider industry stakeholders,” she said. “This will be a wide-ranging refresh which will look at not only the standards themselves but how they are communicated to customers to ensure that they provide the best protection possible.”
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