Or, to be a little blunter, will the equity release industry ever shake off its image as a member of the dark side of financial services? Always to remain in the same bad-boy camp as the big casino banks.
An industry that some people – leading financial experts, well-known consumer champions – believe exploits cash-poor pensioners living in homes they do not want to desert or downsize from. One that cries: “Give us your house and we’ll give you tuppence ha’penny in return.”
I have been waiting 25 long years for the dark clouds to be blown away and replaced by a state of equity-release nirvana. But they never quite disappear. The sun never quite breaks through. The dark side always triumphs.
Despite the formation of Ship (Safe Home Income Plans), the splendid ground-breaking work of home income specialists such as Cecil Hinton at Hinton & Wild (a company no more) in the 1990s, and the creation of the Equity Release Council, the equity release industry still remains prone to criticism. And it does not deal with it very well. One step forward, two steps back.
Take the acres of press coverage recently given to former tennis star Andrew Castle’s spat over the early redemption penalties his parents-in-law, Eva and Anders Hilding, were required to pay on an equity release plan they took out on a home in Bridport, Dorset in 2009.
Wishing to move nearer to Mr Castle’s wife, Sofia, they were hit with £17,500 of early redemption penalties on an original loan of £70,000 plus interest charges compounding at six per cent a year.
As Mr Castle told my colleague Donna Ferguson in The Mail on Sunday – she broke the story in June 2015 – “they paid £47,000 for the privilege of borrowing £70,000 for five years. That is a rip-off.”
For good measure, he said lifetime mortgages were “one of the biggest scandals in this country” and that “the elderly and the vulnerable are being taken advantage of”.
Despite the fact that the complaint Mr Castle brought before Fos was not upheld because all charges had been disclosed in the original documents that his parents-in-law had received, Mr Castle’s views were widely followed up – and sympathetically reported.
For example, writing in the Sun newspaper, its former editor Kelvin MacKenzie saluted him, describing equity release schemes as a “racket” and imploring Mr Castle to become a “champion for those who can’t defend themselves”.
