She said: "It is high time that it was thoroughly reviewed and that steps are taken to ensure that consumers are not penalised financially for trying to return to employment or for taking other proactive steps to improve their quality of life.
“This topic is of great interest to SHIP as – at the start of the year – we launched a campaign for the clarification of how state benefits interact with equity release.
"There is a huge amount of confusion in this area and we have found that intermediaries as well as consumers are unclear as to how taking out these products can impact upon the payment of means-tested benefits such as pension credit and council tax benefit.
“We recently finished a piece of research amongst UK intermediaries to find out their views on this topic and will be launching a working group to decide on the next steps.
"This group will be comprised of leading members of the provider, intermediary, political and third-sector communities who all have an important contribution to make to this debate.
“The Government’s announcement highlights its realisation that the current system is not meeting the needs of the general public.
"This puts SHIP in an ideal position to lobby to ensure that, when the new rules and regulations are outlined, the relationship between equity release and means tested benefits is clearly laid out.
“For many people, their home is their largest asset and in a country that is suffering from a retirement funding crisis, it is essential that we do our utmost to allow consumers the choice of accessing their housing equity without penalty.
"Clarification of the relationship between benefits and equity release is therefore vital.”
