The Equity Release Council (ERC) has updated its standards to support good consumer outcomes, as well as generate innovation within the later life lending sector.

Currently, all ERC members must adhere to a set of standards and principles which safeguard customers by ensuring they are fully informed, and that their products and services meet best practice.

After consultation with stakeholders and members, two notable changes will be made to increase product flexibility and consumer choice in later life, which will come into effect from 1 March 2024.

New standards for mandatory payment lifetime mortgages have been developed to offer customers enhanced protections and additional peace of mind.

Furthermore, the standards now include the requirement for advisers to cover income and expenditure as part of the advice process.

This metric is already included in many adviser discussions alongside topics such as alternatives to equity release but to ensure that it is consistently delivered, council standards now mandate this.

Chair of the ERC’s standards committee, Michelle Highman, said: "The council’s standards have been vital to the development of a vibrant market, but it is important that we regularly review them and consider how we best serve customers as well as support innovation within this sector.

"The council is therefore undertaking a thorough review in 2024 with input from members, stakeholders, and other interested parties. The evolution of our standards is key to helping the market continue to grow and ensure that the diverse customers who choose to access their housing equity can do so with confidence."

Consumer-focused equity release standards were first introduced in 1991 by the ERC and have since evolved to build and maintain trust in a market of 650,000 customers.

Chief executive officer at Legal & General Home Finance, Craig Brown, added that the ERC has an "unrivalled reputation" for driving forward best practice and ensuring the best outcomes for customers.

"The council’s continued oversight gives homeowners the assurance they are properly protected when they access the value held in their homes and by evolving industry standards, such as the changes announced today, the ERC is continuing to make sure customers remain at the heart of everything we do as an industry," Brown added.

"The council’s announcement today gives customers the peace-of-mind that comes with its endorsement when considering new products, but also sends a signal to the industry that product innovations such as this, rooted in customer need, are important for the sector’s continued evolution. We’re delighted to have led on this change and will continue to work closely with the ERC in our shared goal of continued progress for customers."

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