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Baroness Hollis calls for equity release review

Baroness Patricia Hollis has called for a formal Government review into the use of equity release for retirement funding.

Speaking yesterday at the launch of a discussion paper by Ship and Ernst and Young, Hollis said equity release should be a core part of retirement planning.

Hollis said: “It is rare for the public and private interests to coincide as they do with equity release. Equity release meets a truly urgent social need in the most decent way possible- Government ministers should be singing its praises, and making it a core part of retirement funding planning.

“This report is a crucial first step in bringing equity release into the public policy arena. I recommend that equity release should develop partnerships with local government, and specialists in other areas to develop Ship ‘kitemarked’ products.

“Finally, 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.”

Ship director general Andrea Rozario says: “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.

“The recent Social Care Green Paper failed to recognise the £700 billion in unmortgaged housing wealth currently held by the over 65’s. Government backed equity release could significantly ease the pressure on the state to subsidise retirement funding, whilst allowing many pensioners the financial freedom to enjoy their retirement.”


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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Equity release review
    This is all very well but we all know what happens when the Government gets involved with retirement matters – GB’s assault on pension investments for instance followed by the “compulsory” personal accounts. By all means promote this opportunity and bring it out from the shadow of the old home reversion schemes but please don’t allow politicians or local government officers any where near it

  2. GB’s retirement funding
    I agree with John Smith on this, letting a load of bureaucrats from the Treasury loose on Equity Release is potentially a disaster. If GB gets anywhere near it it will also be complicated, micro-managed to the ..enth degree and ultimately of little benefit to those it is designed for.
    GB’s Tax change on pension funds a decade ago is a case in point.
    UK State pensions have always been below the poverty line, topped up by means tested additions. This was sort of accepted because there was an option to save ‘Tax Free’ in a Pension Fund and companies and later private individuals took this on board. GB then welched on the deal by Taxing these funds so it is natural that they have declined significantly. Too clever by half that one as he either couldn’t or wouldn’t see what the likely consequences would be.
    Then came pensions for all that no pensions providers really wanted to be involved with. Now we have this Govt. trying another tack. Don’t know how successful this will be because taking out equity from a home is a slippery slope which gets steeper and steeper the longer the borrower lives.

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