Equity Release: Interest Charges
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of the charging of (a) interest and (b) compound interest on Equity Release Loans by financial services companies on (i) elderly customers and (ii) relatives of deceased customers.
Answered by Emma Reynolds
Decisions concerning the design of loans, including the interest charged, are commercial decisions for firms in which the Government does not intervene.
However, equity release products are regulated by the Financial Conduct Authority and so benefit from consumer protections under the Financial Conduct Authority’s rules, including requiring lenders to engage and provide tailored support to their customers and that advertising is clear, fair and not misleading. Anyone considering equity release should seek independent financial advice to help ensure that the product is suitable for their individual needs.
The Equity Release Council, which represents the sector, also promotes high standards of conduct and practice across the industry.
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