Equity Release Council launches Standards 2.0

The Equity Release Council, the trade body for the equity release industry¹, launched Standards 2.0 in May 2025¹. The Council said the new version followed "significant consultation with the wider industry as well as members"¹. The Standards set out the rules that Council members are required to follow, alongside a new Consumer Charter¹.

The Council describes itself as a voluntary body that works to ensure its members act with professionalism and integrity¹. It states that it is not authorised under the Financial Services and Markets Act 2000 and cannot offer investment advice¹. The Standards Committee, which is independently chaired and made up of adviser, lawyer and associate members, oversees the rules¹.

The Consumer Charter sets out four commitments: trusted, tailored, thorough and transparent treatment¹. Under the tailored heading, the Council says customers can expect recommendations that consider their personal circumstances, including an assessment of income and expenses, and that alternatives to equity release will be explored¹. Under transparent, it says the advice, its scope, product details, terms and conditions, Product Standards, fees and charges, and the potential financial impact on family and inheritance will all be clearly explained¹.

The Product Standards cover three product types: core lifetime mortgages, mandatory payment lifetime mortgages and home reversion plans¹. For core lifetime mortgages, interest rates must be fixed, or variable with a fixed cap, for the life of the mortgage¹. Customers must have the right to live in the property for the remainder of their life, or until they permanently move into care¹. They must be allowed to move to a suitable alternative property and transfer their lifetime mortgage, subject to lending criteria at the time of the move¹. The product must carry a no negative equity guarantee, so that provided the property is sold for the best price reasonably obtainable and the contract terms are met, the borrower or estate will never owe more than the property is worth after reasonable sales costs¹. Customers must be able to make repayments without incurring charges, subject to the provider's lending criteria¹.

The new standard on care applies where a customer needs to move permanently into long-term care, whether in a care home (commercial, NHS or local authority) or with relatives providing care. In that case any early repayment charge will be waived by the lender on receipt of a medical practitioner's certificate, provided the terms and conditions of the loan have been met¹.

For mandatory payment lifetime mortgages, which require payments for a set period, the Council states that if mandatory payments are not made the customer's home is at risk of repossession¹. Customers must at least be able to make repayments without costs or charges once the mandatory payment period has ended, subject to lending criteria¹. For home reversion plans, which involve the sale of part or all of the property, customers must be offered a new plan for a suitable alternative property on terms no less favourable than those offered to new customers at the time, and a provider may charge reasonable costs and expenses for entering into the new plan¹.

Where a product does not comply with every standard, the provider must clearly explain which standards are not met and what risks this may pose¹.

Why it matters for households

The care-related waiver applies to customers who move permanently into long-term care, whether into a care home or to live with relatives who provide care, and takes effect on receipt of a medical practitioner's certificate where the loan terms have been met¹. For households weighing up equity release, the change concerns the early repayment charges that can otherwise apply when a plan is repaid early, including on a move into care¹. The Council's existing rules on moving house with equity release and on equity release when one partner dies or moves into care sit alongside the new standard¹.

The Standards are voluntary and apply to Council members, not to the whole market¹. The Council states that statutory rules provide a minimum element of protection, and that these enhanced Standards are adhered to on a voluntary basis¹. The Consumer Charter commitments on income and expenditure assessment, exploration of alternatives and explanation of fees and inheritance effects describe what customers of member firms can expect¹. The no negative equity guarantee remains a product requirement for core lifetime mortgages¹, and the rules on taking out equity release without advice are unchanged by this document¹.

What happens next

The Council has not reported a further timetable beyond the May 2025 launch¹. It says additional guidance, good practice examples and supporting materials have been developed to help members apply the Standards, available in the members' area of its website¹. Where a new product or practice offers potential consumer benefits but does not align with the existing rules, the Standards Committee will consider the case and determine an appropriate course of action¹.