Politician Baroness Patricia Hollis has called on the Government to review how it perceives equity release as a sound method for funding retirement.
At the launch of a discussion paper from SHIP (Safe Home Income Plans), Baroness Hollis said yesterday that "Equity release meets a truly urgent social need in the most decent way possible," and that "government ministers should be singing its praises, and making it a core part of retirement funding planning."
"It is rare for the public and private interests to coincide as they do with equity release," she said.
The Baroness said that the report from SHIP, entitled ‘Facing the Future, Redefining Equity Release to meet today's social and economic challenges', is a "crucial first step in bringing equity release into the public policy arena."
She added: "I recommend that equity release should develop partnerships with local government," that, alongside a formal review of the industry, "a government department should take responsibility for equity release and make sure that it is a major player at the table. Equity release must be transformed from a distress option, and taken mainstream."
Others present at the launch of the report in London this week included representatives from Age Concern and Help the Aged, along with other key influential figures, who have come together to discuss the funding shortfall for pensioners as a result of falling interest rates and damaged investment returns.
Commenting on Baroness Hollis' speech, Andrea Rozario, director general of SHIP, said: "It is fantastic to see the support that equity release is garnering amongst senior political figures. We welcome Baroness Hollis' calls for the government to seriously consider the use of housing equity as a major source for retirement funding in the UK."
She continued to say that if the Government endorsed equity release, rather than seeing it as the option of last resort, this could "significantly ease the pressure on the state to subsidise retirement funding, whilst allowing many pensioners the financial freedom to enjoy their retirement."
Vanessa Owen, head of equity release at LV=, said SHIP has played a "vital" role as trade body for equity release providers. "The code it has developed has been central to ensuring the protection and peace of mind of consumers who have purchased SHIP compliant lifetime mortgages and home reversion plans," she said.
Commenting on SHIP's discussion paper, she said: "We will be fully engaging with SHIP on this paper, and we anticipate that other SHIP members will be active participates in this debate, which will help shape the future of the regulated equity release market."
© Fair Investment Company Ltd
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