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Pru dismisses NU home-reversion plan guarantee

Norwich Union’s decision to enter the home-reversion market is baffling, according to Prudential director of lifetime mortgages Ali Crossley.

Crossley says he does not understand why NU is keen to enter an unregulated arena and that NU’s guarantee does not equate to value for money for the customer.

NU’s house price inflation guarantee means if the price of the property has risen more than 7.5 per cent a year above inflation since the start of the plan, the excess is shared equally between the customer and the provider.

Crossley says this does not necessarily mean a good deal for the customer.

NU has capped the eligibility age at 80. Crossley says this is interesting as the present average life expectancy for a woman is 87.

Key Retirement Solutions business development director Dean Mirfin says: “In effect, Norwich Union is dictating the type of client they want.”

Prudential says it currently has no plans to enter the home-reversion market. It offers lifetime plans through Northern Rock.

Crossley says: “This has totally flummoxed me. I would urge customers and advisers to be very careful. We should only be dealing with regulated products in this arena.”

NU director of personal finance Mark Kelly says: “We subscribe to the Ship code of conduct and will continue to press the Government to regulate this area.”

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