03 October 2008 / by Rachael Stiles
New clarification of the safeguards involved in equity release from SHIP (Safe Home Income Plans) will bring more security for customers of equity release.
Members of SHIP will now have to adhere to the new plans that are intended to offer additional protection for people who want to release value from their homes using an equity release scheme.
As the cost of living encroaches on household income and scant pensions, some who are struggling to make ends meet are turning to equity release as a way of boosting their income.
To the existing safeguards already in place will be added the extra security of solicitors that are working on equity release cases having to sign a clause which states their independence from the equity release provider and financial adviser.
The introduction of this measure will confirm that the solicitor has not been offered any financial incentive and does not have any connection with other parties which could potentially jeopardise their impartiality.
Solicitors will also have to sign the certificate which is already in place and states the costs of equity release to the householder’s assets and estate.
Customers are already informed of this information, but ensuring that the solicitor also signs the certificate – without which an equity release plan cannot proceed – they acknowledge that the essential features and possible implications of the plan have been brought to the attention of the customer.
“The SHIP certificate makes it clear that there is to be no remuneration between advisers and solicitors.” explains Andrea Rozario, director general of SHIP.
“Although this already part of the SHIP code of conduct, this clarification of the safeguard leaves no room for misunderstanding. Customers taking out equity release from a SHIP member can be sure that they are taking on a regulated equity release plan from a reputable provider.” she said.
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