On 11 May 2022, the Financial Services Consumer Panel (FSCP) published new research covering the experiences of consumers as they choose and buy equity release. The research indicates that the prevailing guidance, sales and advice processes may exacerbate some of the risks faced by consumers of equity release. The research findings suggest that consumers who purchase from a position of vulnerability may struggle to consider the long-term implications of their choice. Decisions made by the participants in the research tended to be informed by marketing and conversations with friends and family rather than through engagement with a professional adviser.
The FSCP has also published a policy paper asking the FCA to support the development of holistic tools and guidance provided by independent bodies, such as the Money and Pensions Service, with the aim of helping people understand and narrow down a broad range of later life lending options and approach the regulated market better able to pursue their objectives.
In the policy paper the FSCP calls for further investigations into:
- How equity release products are marketed and sold to later life consumers, including the role of financial promotions, direct marketing, and commission-based sales.
- Whether regulation and industry standards can do more to protect consumers from financial and psychological harms.
- The impact on consumers of the different regulatory regimes for equity release and alternative products.
- The risks to the FCA and industry posed by increasing demand from customers who purchase from a position of vulnerability