Single Financial Guidance Body to signpost equity release

Ryan Bembridge

September 28, 2018

The government’s Single Financial Guidance Body will signpost customers to equity release, as well as other mortgages, shared ownership and shared equity.

The Single Financial Guidance Body will combine the Money Advice Service, the Pensions Advisory Service and Pension Wise. It will be chaired by former Financial Services Authority chief executive Hector Sants.

The government said: “The Single Financial Guidance Body’s role is to ensure that members of the public have access to the relevant guidance that allows them to be informed and educated about how to manage their money well and avoid falling into problem debt.

“Whilst the body will not offer financial advice, it will be able to help people understand when professional financial advice could be useful and how to access it.

“It will signpost consumers to information on all money matters, including mortgages and equity release, shared ownership and shared equity, and on re-investing the proceeds of sales.”

The government was responding to the second report of 2017-19 of the Housing, Communities and Local Government Select Committee inquiry into housing for older people.

David Burrowes, chairman of the Equity Release Council, said: “This recommendation amounts to a clear vote of confidence from government that equity release plays a key role in later life planning conversations alongside other forms of housing finance.

“The council has long championed the view that the option to unlock some of their housing wealth should be on every older homeowner’s checklist to consider, and the wide range of equity release products today can suit a similarly wide range of personal needs.

“We welcome the growing consensus that consumers will benefit by taking a more rounded approach to their retirement planning and considering property assets alongside their savings and pensions.

“It is important this recommendation is implemented in a way that recognises the need for specialist equity release advice, and promotes joined-up thinking about the full range of options available and how people’s needs may evolve at different stages of life.”

Will Hale, chief executive of equity release adviser Key, was buoyed by the news.

He said: “We are delighted to see that people who speak to the Single Financial Guidance Body will be signposted to information on a variety of money matters including equity release.

“For a lot of older people, their home is their largest asset and with people living longer but relying on shrinking pension pots to meet a variety of needs, it is only sensible that they consider whether they want to use housing equity to improve their standard of living.

“While this move is welcome and clearly underlines the role that the government sees housing equity playing in retirement, we need to ensure that the information people are signposted to gives a clear representation of the modern equity release market.

“As advisers, we still find that customers and their families have misconceptions around how these products work so this is a great opportunity to help people understand how housing equity can improve their standard of living in retirement.”

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