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Treasury plea to societies on equity release

The Treasury has called for more building societies to offer equ-ity release as a way of helping the Government face long-term retirement challenges.

Speaking at the BSA conference, Treasury director for financial services policy Clive Maxwell called on societies to offer new products such as equity release. He said: “Societies need to help us rise to the challenge of long-term demographic change in saving towards retirement. Marketing of equity release will play an important role.”

Few societies offer the product due to regulatory worries but many mutuals are reviewing their stance.

NU director of sales and marketing Darren Carter said the brand affinity of societies will be invaluable in persuading more people of the benefits of equity release.

Carter said he believed that regulatory nervousness rather than issues surrounding funding or structuring of the product is keeping societies away from the sector.

But he said that developments in regulation as well as the probability of another FSA clampdown in the wake of mystery-shopping exercises mean societies can be assured that the product would not present conflicts of interest.

Carter said: “There are not enough brands in the market. Your brands have a very strong brand affinity and this is a role that you can play that will be important in this marketplace.”

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