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Old Mutual: FCA should review dropped equity release qualification

UK-Houses-Home-Mortgage-700x450.jpgOld Mutual has called on the FCA to reverse its decision not to create a standalone equity release qualification for financial advisers.

The call follows figures published today from the Equity Release Council which show a record quarter for equity release activity in Q4 2017.

The total amount of housing wealth unlocked by over-55 homeowners reached £3.06bn in 2017 – the first time it has exceeded £3bn in a single year.

Such numbers demonstrate the considerable role housing wealth plays when people plan their finances, according to Intrinsic mortgage network managing director Gemma Harle.

She says recent research from Old Mutual Wealth, involving people aged over 50, found equity release accounted for 7 per cent of current retirees’ retirement income, for those who use it.

However those over 50 and yet to retire say they plan to secure 26 per cent of their total income from it.

Given the growing market, Old Mutual Wealth wants the regulator to revive plans to establish an equity release qualification for advisers, which it shelved in May 2017.

Harle says: “It is crucial to take advice as relying on your home in retirement is difficult and accessing it isn’t as simple as opening the right door. Last year the FCA decided to drop plans to create a standalone equity release qualification for financial advisers.

“These figures suggest a review of the qualification would make some sense, given the general direction of travel for retirement planning. This would help financial advisers meet the growing demand for a holistic approach to financial planning that includes equity release, whose popularity is growing at a serious pace.”

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