New single guidance body given government backing to signpost equity release

The Single Financial Guidance Body will bring together the services currently delivered by the Money Advice Service, the Pensions Advisory Service and Pension Wise.

The Housing, Communities and Local Government Select Committee recommended that where an older person is rejected for a mortgage or remortgage, the lender should "routinely refer them to another lender, a mortgage broker or, once established, the single financial guidance body".

In its response, the Government noted that the Financial Guidance and Claims Act 2018 creates a requirement for the FCA to make rules signposting to the body’s guidance services, and that these rules could require lenders to signpost such consumers to the Single Financial Guidance Body for financial guidance.

However it stressed that whilst the Single Financial Guidance Body will provide financial guidance, "it will not be responsible for providing any kind of financial advice aside from debt advice".

Despite this, the Government hopes it will "be able to help people understand when professional financial advice could be useful and how to access it".

It confirmed that the body will be able to signpost consumers to information on all money matters, including mortgages and equity release, shared ownership and shared equity, and on re-investing the proceeds of sales.

In its response, the Government said it also wants high street lenders to provide clearer guidance on their policy with respect to lending to older people.

David Burrowes, Chairman of the Equity Release Council, said: “This recommendation amounts to a clear vote of confidence from Government that equity release plays a key role in later life planning conversations alongside other forms of housing finance. The Council has long championed the view that the option to unlock some of their housing wealth should be on every older homeowner’s checklist to consider, and the wide range of equity release products today can suit a similarly wide range of personal needs.

“We welcome the growing consensus that consumers will benefit by taking a more rounded approach to their retirement planning and considering property assets alongside their savings and pensions. It is important this recommendation is implemented in a way that recognises the need for specialist equity release advice, and promotes joined-up thinking about the full range of options available and how people’s needs may evolve at different stages of life.”