Nationwide is eyeing a launch into the equity release sector.
Speaking to the Times, the UK’s second biggest lender said it had been looking at ways to allow older borrowers to release equity in their homes to allow them to help their children get on the housing ladder or to pay for care.
Chief executive Joe Garner told the paper: “The challenge is how do you do it in a clear, simple, safe and secure way.”
However, retail director Chris Rhodes said the product would not resemble a typical equity release product.
He said: “We want a decent fixed interest rate without access charges or penalties… and a no-negative-equity guarantee so that ultimately you never end up being repossessed.”
Retirement Advantage product and communications manager Alice Watson says: “New entrants to the equity release market provide welcome competition and spur product innovation, which ultimately benefits consumers and grows the size of the market. Nationwide is right to say that developing products which are safe and secure is important.
“However, the truth is the equity release market already offers a raft of products which provide safety, flexibility and comfort to customers.”
She adds: “There are still misconceptions around the equity release industry. Many remember how it was a decade or more ago, and question whether it is a viable option for retirees today. The truth is that this is an industry which has grown and matured at a rapid rate, and far from being a last resort option it is a proactive and well planned income choice for over-55s up and down the country.
“As an industry, we should be proud of how far we have come and unafraid to address inaccurate perceptions about the safety and security of the products we offer.”