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Which? draws up plans for state-run scheme

Proposals for a state-run equity-release scheme are being drawn up by Which? for submission to the Government later this year.

Which? is compiling a dossier outlining its plans, claiming that the market is failing to protect vulnerable customers.

The consumer watchdog, which published a damning report on the market at the start of this month, is also lobbying MPs to gain cross-party support for its crusade against current practices.

It has refused to rule out making a super-complaint about equity-release sales tactics in the future.

Which? is proposing a not-for-profit system, similar to Lord Turner’s proposed National Pensions Savings Scheme, to compete against the private sector.

Principal researcher Teresa Fritz says: “It is something we are formulating and we will try to come up with realistic cost research to take to the Government. We are not expecting taxpayers to fund it but the interest rate should cover the costs. This would be the perfect answer.”

Pink Home Loans managing director Tony Jones says it is a good idea for the Government to support the market but not to the extent that Which? is calling for.

He says: “I think if the Government provided support for lenders to enter the market, then it would provide a level of reassurance for lenders and consumers.”

GE Life equity-release product manager Simon Little says the market should be left alone. He says: “The sector is working hard with the regulator to improve standards itself.”

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