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Equity-release firms hit back at Which?

Equity-release providers have hit back after their products came under fire from Which? claims of being too expensive and misleadingly advertised.

Which? claims that most customers would be better off downsizing or borrowing from their family, as it says lifetime mortgages and home-reversion plans have high costs.

But leading industry figures insist that the research is out of date and fails to take into account that prices and interest rates have fallen over the past few months.

Norwich Union came under particular attack in the report, with Which? branding its advertising as irresponsible because it suggests its scheme could pay for a holiday.

NU personal finance sales and marketing director Daren Carter responds: “It is laughable to say we are irresponsible as there is a full advice process.”

Which? editor Malcolm Coles says: “Lenders want to sell you a lifestyle dream but the reality can be very different. These schemes could turn into a financial nightmare which can stay with you the rest of your life.”

Just Retirement sales director Andrew Megson says: “We firmly believe in the equity-release market and it is a solution in specific circumstances. The report was focused on products a year ago. The cost and transparency of them has improved since then and interest rates have dropped.”

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