Safe Home Income Plans in 2022

Discover What's a Safe Home Income Plan

Contributors: Nicola Date, Katherine Read. Reviewed by Francis Hui

As the Equity Release Market Expands, Safety Is Paramount. Hence, the Formation of Safe Home Income Plans. What Are They, and Do They Still Exist Today? Find Out Now.

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Discover the Secret to Safe Home Income Plans

You must know all the lingo to unlock equity with confidence!

If you don’t, you could end up being taken advantage of by dubious lenders and in a position where equity release was the biggest mistake of your life.

Don’t stress. We’ve got your back. Our comprehensive site has up-to-date information on all things equity release.

We’ll help you discover:

  • What’s a Safe Home Income Plans
  • The history of SHIP
  • If they’re still relevant today

As a leading equity release information hub, our team spends countless hours researching all the latest market updates and product news.

In addition, we delve into the history to give you a 360-degree picture of equity release.

Are you curious to know what a SHIP is? Find out now!

SHIP Explained

To explain SHIP, it’s the old name of the now active Equity Release Council.

Formed in 1991, it’s the original name for the governing body created to protect the once dodgy equity release industry.

In 2012, their name changed to the Equity Release Council1.

The Pressing Need for Home Income Plans

The pressing need for home income plans prompted the organisation to be formed.

Before SHIP, the equity release market was fraught with corruption, leaving many elderly homeowners in the dust, riddled with crippling debt.

In addition to preventing fraud, the body was developed in response to pensioner ‘investment’ schemes in the late 1980s.

These risky schemes were structured so that equity was released from the property through a mortgage2, and the capital was then reinvested into a bond or a similar investment.

This was initially intended to provide sufficient income to pay the mortgage and give the investor additional income.

In principle, it could work if investment returns are high and interest rates low,

But when the equity release market slowed down and interest rates increased, investors suffered on several fronts, including:

  • The value of their investment plummeted.
  • The same happened to their investment income.
  • Mortgage repayments increased drastically.
  • The property value dropped, causing negative equity3.
  • In the worst cases, homes were repossessed, and the investors were left owing more than the value of their property.

These schemes were fortunately banned in 1990.

Recapping the Role of the Equity Release Council

The role of the Equity Release Council is to protect all clients who release equity through a lender who holds a membership.

Whatever you do, never release equity through a plan provider that’s not registered with the council.

Here are 6 main functions:

  • You may remain on the property for life until they pass away.
  • To ensure no confusion occurs, you must be offered clear, concise paperwork that includes all setup bills and residence value changes.
  • Your representative preference steers any legal work. You then sign a certificate stating that the plan has been clarified and that you comprehend the risks.
  • You can move your plan to another property without penalties.
  • An Equity Release Certificate defines the cost of your asset and estate.
  • Equity release carries a ‘no negative equity guarantee4.

In Conclusion

While they’re no longer known as Safe Home Income Plans,

The Equity Release Council still very much exists and plays an active role in protecting the livelihood of homeowners across the UK.

Now more than ever, equity release is a safe solution to unlocking the key to your retirement dreams.

In addition, with interest rates being at an all-time low, it could be a highly profitable way to live financially stress-free for the rest of your days.

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.

rachel w

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.
John Lawson

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.

Reviewed 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.
kath icon

Katherine Read
Consumer Affairs Writer

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.

Nicola Date
Writer & 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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As Featured In
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