Equity Release Companies to Avoid in Oct 2021

Should You Avoid these Equity Release Providers?

Do You Want to Release Some Cash From the Equity in Your House But Don’t Know Which Equity Release Companies to Trust? Discover Which Firms to Avoid Here…

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Avoid these Equity Release Companies

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Don’t get duped by an illegitimate equity release provider that will end up ruining your retirement!

In the first half of 2021 alone, 36 million people in the UK were victims of scams, and many of these instances were mortgage fraud.

We’ll help you avoid becoming a statistic by:

  • Sharing what to look out for when selecting your equity release plan in Oct 2021.
  • Helping you to learn which equity release lenders are legitimate.
  • Guiding you in understanding what and who you should avoid when releasing equity from your home.

Releasing equity has never been safer, but only if you avoid dubious lenders. The last thing you want to do is release cash, only to realise that you’ve been let down, costing you £1000s.

Our expert team has narrowed down the top equity release providers in the UK, and from there, discovered what they all have in common. In addition, we’ve looked into the regulations required to be a registered equity release lender and we’re here to share.

The question is, how can you know if your potential lender is legitimate?

Let’s find out!

For a summary, watch the video below, and then continue reading to discover more!

4 Questions to Help You Identify Which Equity Release Companies to Avoid in Oct 2021

Equity release has had a bad reputation in the past, with many dubious lenders taking advantage of elderly folk, and providing dodgy plans with high interest rates.

Great news!

Since 1991, the Equity Release Council1 has regulated equity release, implementing strict laws that protect the consumer.

To help you avoid choosing the wrong equity release provider, here are the 4 questions to ask when carrying out your search:

10 of the Best Equity Release Companies in the UK

1. Are They Registered With the FCA and a Member of the ERC?

TAKE NOTE: You MUST avoid all lenders who are not members of the Equity Release Council.

Suppose a company claiming to provide equity release schemes is not registered with the Financial Conduct Authority (FCA2) and isn’t a member of the Equity Release Council. In that case, it implies that they are not regulated.

Equity Release Council members must offer plans with:

  • A ‘no negative equity guarantee’.
  • Fixed or capped interest rates.
  • The right to remain living on your property for the rest of your life.
  • The right to move to another property.
  • Reasonable interest rates, in line with industry standards.
  • An early settlement fee structure.

You will not be protected if you borrow from an unregulated lender, and you’re at risk of being duped into buying a product for which you have no recourse.

Regulated lenders follow the directives, standards and regulations set in place by the ERC, so ensure your safety by checking if a lender is one.

2. Are They Upfront With Expected Costs?

There are some costs involved when releasing equity from your home that you need to be aware of.

Working with an experienced lender means that they will be fully upfront about all the costs involved, having no hidden terms and conditions.

If your lender is unclear about the costs involved, you would be better off finding an alternative provider that you can trust.

3. Are there reasonable early repayment charges?

Life doesn’t always go as planned, meaning you might end up being in a position, for whatever reason, where you need to forfeit your equity release plan before you die or move into permanent care.

In such cases, there will be early repayment charges.

That being said, members of the Equity Release Council will have a reasonable and competitive early settlement fee structure.

Be sure to enquire about this with your financial adviser.

4. Are They Offering Loans Before Knowing Your Circumstances?

If a company offers you a loan, before even looking into your details and property valuation, avoid them at all costs!

If it seems too good to be true, it might just be!

Equity release is a process that takes 4 – 12 weeks and involves legal representation and a detailed property valuation. Any company that offers an instant cash injection with no groundwork is not a legitimate equity release lender.

Find out more: How Rising House Prices Affect Equity Release

The Worst Equity Release Companies in the UK

Got Questions About Which Companies to Avoid? Check These Out First!

What Equity Release Providers Should I Avoid?

Which Providers Offer a 'No Negative Equity Guarantee'?

In Conclusion

If equity release is done correctly, it can be an incredible way to give you a cash injection while still being able to live in your precious family home.

However, you MUST work with a trusted financial adviser and select a lender that is a member of the Equity Release Council.

Now that you know which companies to avoid, it’s time to look at the best equity release providers in Oct 2021 2021. Perhaps one of these lenders has a plan that is right for you.

In addition, you can use our Home Equity Release Calculator UK to find out how much cash is tied up in your home!

Editorial Note: This content has been independently collected by the SovereignBoss advisor team and is offered on a non-advised basis. Sovereignboss may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.

Contributors: Nicola Date, Katherine Read
Reviewed by Francis Hui

Equity Release Companies to Avoid

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Most people are using equity release as a means of retaining the use of their house while also obtaining a lump sum or a steady stream of income. Get matched with an expert and check your eligibility for equity release options.

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Written by
Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.
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Written by
John Lawson
Founder SovereignBoss

John is passionate about education and has made it his life-long mission to assist UK citizens on their future financial options, with a specialist interest in equity release, and SovereignBoss is the natural extension of this passion.

Written by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
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Written by
Katherine Read
Financial Planning Reporter

Since joining the editorial team at SovereignBoss, Katherine has become focused on bringing transparency to finances and opportunities for those approaching retirement age. She writes on the topics of equity release, home reversion, and mortgages.

Written by
Nicola Date
Writer & Financial Journalist

Nicola is a financial writer for SovereignBoss and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.

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