ABI - Regulation of home reversion schemes

Wednesday, 18, May 2005 08:44

VICTORY ON EQUITY RELEASE HOME REVERSION SCHEME REGULATION

(197 words)

Today's announcement in the Queen's Speech that the Government will legislate for the regulation of all equity release schemes will benefit consumers and the insurance industry, says the ABI. The Association campaigned for home reversion schemes to be covered by the same regulatory framework as lifetime mortgages for some time. A coalition of organisations, including the ABI, Help the Aged, the Council of Mortgage Lenders (CML) and the Association of Independent Financial Advisers (AIFA), came together last year to press the Government for action.

Helen McCarthy, ABI Head of Pensions and Savings Development, said:

"Home reversion schemes are an important product, especially for homeowners who have not saved enough for their retirement.

"With the equity release market set to grow, both in size and importance, it is vital that consumers know that they are properly protected. The main customers of these products will be elderly and potentially vulnerable people, which is why regulation in this area is of particular value. We are pleased that the Government has fulfilled its promise to us and the other members of our coalition to ensure that home reversion schemes will now be covered by the same proportionate regulation as lifetime mortgages."

- ENDS -

Notes for Editors

2. The coalition of organisations which lobbied the government for regulation of home reversion schemes consisted of the ABI, the Society of Financial Advisers, the Council of Mortgage Lenders, the Association of Mortgage Intermediaries, Help the Aged, the National Consumer Council and the Association of Independent Financial Advisers. A letter on this subject from the coalition was published in the Times newspaper on 5 April 2004.

3. The ABI is the trade association for Britain's insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a fifth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.