In a policy document discussed by Labour MPs last weekend a proposal was included which involved the government helping pensioners release equity in their homes.
A Labour spokeswoman said: “It is one solution that has been put on the table for consideration. There has been no detailed thinking on it and there are no concrete plans to introduce it. It is an idea that has been put forward.”
But brokers specialising in equity release said the idea should not even be considered.
Dean Mirfin, business development manager at Key Retirement Solutions, said: “This is a ludicrous idea. It is suggested the government would provide a scheme at low interest rates, but in an environment where professional advice and a range of competitive products is key, a government-run equity release scheme would not be beneficial to clients.”
Jamie Ware, managing director of Churchill Investments, commented: “Gordon Brown’s raided everyone’s pension so he might as well take their houses as well. This is complete nonsense. Equity release is complex. I can’t see how this government scheme would work in practice.”
However, Roger Hillier, product development manager at Mortgage Express, said if the proposal was implemented it could result in greater customer awareness. “It would be interesting to see how the government would monitor the risk, but it is a good idea insofar that people’s attention would be drawn to the fact that equity release could be a viable option for them,” he said.
Recent figures released by Safe Home Income Plans (SHIP), based on data given by 18 of its members, showed new equity release business written in the six months to 30 June 2004 was slightly lower than for the same period in 2003.
