The Equity Release Council has suggested HM Treasury should lead efforts to better support the UK’s ageing society.
In a white paper, the council proposes government oversight of other relevant departments – including the Department for Work and Pensions, the Department for Communities and Local Government and the Department of Health – makes it the natural choice to coordinate policy on equity release.
The paper includes seven specific recommendations, namely that government should:
1) Consider the role of equity release as part of its strategy for addressing the challenges of an ageing society, ensuring that people are able to utilise housing wealth to improve their income and well-being in retirement where appropriate;
2) Expand the scope of the Pension Wise service to enable users to understand how accessing housing wealth may provide solutions to satisfy their objectives;
3) Consider how equity release can be utilised to help people pay for home care - providing financial resources, which can help people retain ownership of their home and stay living in it for longer;
4) in conjunction with local authorities and other stakeholders, develop clear pathways for local authorities to use to help people who are seeking support on financing care services understand when they should access regulated financial advice and how they should go about doing so;
5) develop a range of case studies to illustrate best practice on referral to financial advice on care funding, which would complement the guidance on the implementation of the Care Act;
6) use the Financial Advice Market Review as an opportunity to ensure that people nearing retirement are able to access independent financial advice, which allows them to consider the full range of relevant issues – including retirement funding, paying for care, home adaptations and leaving money to children and grandchildren.
7) ensure the Financial Conduct Authority’s review of the equity release market is wide-ranging and considers the impact of the regulatory framework on the equity release market, as well as other potential barriers to increasing the size of the market.
Nigel Waterson, chairman of the Equity Release Council, said: “We urge the Treasury to become our sponsor across Whitehall, and we are delighted that the Work & Pensions select committee have just in the last couple of days endorsed our view that the Pension Wise guidance be extended to cover housing wealth.”
Dean Mirfin, technical director at Key Retirement, said: “The third crucial element is advice and the ERC’s call for a co-ordinated approach to government policy on equity release is very welcome and particularly its focus on the role of advice and the Financial Advice Market Review.”
Andrea Rozario, chief corporate officer at Bower Retirement Services, said: “Property wealth is already playing a major role in enhancing standards of living in retirement as the growth of the equity release market demonstrates and the council is right to press the government to recognise that.