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Ship rejects MPs’ claims over equity-release ads

Safe Home Income Plans has hit back at Labour backbenchers’ claims of flawed equity-release advertising, saying increased competition this year will boost product innovation.

But trouble could be brewing, with a Ship member survey predicting that equity-release products could be aimed at younger people this year.

Labour MPs have accused Norwich Union and other equity-release providers of target their ads at an audience which is too young for the products, without properly highlighting the downsides of the product such as high minimum withdrawals and high repayment values.

Ship claims that the equity-release sector is now more competitive, with interest rates either staying the same or decreasing.

The 18 Ship members which took part in the survey say flexible drawdown facilities are highest on the list of attractions for equity-release customers. Low interest rates and good loan to value percentages are also highlighted.

Members say this year will see greater flexibility in equity-release contracts. Set-up costs, fees and early repayment charges are also widely expec- ted to fall.

The survey findings say that HSBC, Barclays, Nationwide, Lloyds TSB, RBS and Halifax will offer equity-release products but despite concerns over the pension savings gap, none of the members believe that the Government will offer its own equity-release product.

The majority say a product that can meet long-term care needs is required although some are opposed to offer- ing long-term care products alongside equity release.

Chairman Jon King says: “The Ship member survey shows that 2006 is likely to be even better for consumers, with greater flexibility, lower costs and continued product innovation.

“Low interest rates, the gro- wing consumer demand and new providers entering the market will all help bring equ- ity release into the financial mainstream.”

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