Equity Release Council Standards Update

The Equity Release Council (ERC) implemented a new set of standards in January 2020. This framework builds upon the existing set of rules and safeguards to create a more outcome-focused approach.

New standards to protect borrowers

This is a continuation of the two-tier protective regime that supports our market - external statutory regulation (legal regulation, FCA) governing providers, and a set of principle & outcome-based standards provided by ERC.

The standards address the particular features of this market, which includes vulnerable customers, long-term products, and a broad set of “product stakeholders” (e.g. family). Also, because of this long-term nature of the contract, the exact outcome of the product may not be known for quite a long time.

The core principles that the ERC has driven a protective regime around are:

Structured financial advice supported by specialist qualifications

Independent legal support

Product feature safeguards, such as the No Negative-Equity Guarantee and the ability to port the mortgage

This latest update adds enhancements to this structure such as:

Requirements around the consideration of the involvement of family within the advice process

Greater focus on ongoing customer engagement and communication, after the initial loan has been advanced

This outcomes-based framework should continue to support the treatment of every customer as an individual, plus the innovation that is needed to support broadening customer needs and the growth potential within the market.

Read the Equity Release Council standards here.

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