Shadow chancellor Vince Cable warns the legacy of lifetime products has made people sceptical about the market.
He says: “There is a need to enable pensioners to release some of the equity in their properties. But the market is not working. I’d like to see the government working with the industry to create standards and products.”
Last week, Cable signed a parliamentary motion calling on the Financial Services Authority to review the selling on of shared appreciation mortgages and to assess the levels of additional charges such as repeat valuations, legal and termination charges.
The motion follows a claim by financial guru Martin Lewis in a Tonight with Trevor McDonald investigation that equity release products are likely to be the next big mis-selling scandal.
Jon King, chief executive of Safe Home Income Plans, says: “Modern equity release products bear no resemblance to the products described in the programme, many of whichdate back to the 1980s.”
Dean Mirfin, business development director at Key Retirement Solutions, says: “Lewis is misguided in assuming clients don’t understand what they have signed. It’s bad if this programme deters people for whom equity release is the right choice, but if it makes consumers better informed, that is good news.”