Equity Release Pressure Sales Techniques

This is a follow-up to my post “Equity Release Revisisted” which prompted me to look into the subject again and start a new series of blogs on the subject.  I first wrote about this in 2012 and then again in 2015.  (You can find my earlier posts by clicking on Equity Release in the TAG CLOUD).

If Equity Release is such a good thing, why are Equity Release sales people so shy about giving out information ?   They all portray an image of being open and honest and above-board, but, they won’t give you any hard facts.

Normally when shops display their goods they put the prices on them, it is only exclusive jewellery shops and fashion retailers that don’t have prices in the window and then you know they are going to be very expensive.

Perhaps that the point.  Equity Release sales people know their products are expensive so they won’t tell you the price until you are subjected to the hard-sell interview first.   You cannot get past the TV commercial or newspaper advert without signing up to an interview / interrogation   / intimidation  or as they would say ‘consultation’.

Here are a few examples of these suspect approaches :-

  • AGE PARTNERSHIP.   Claim to be the biggest provider of Equity Release with a logo that has a remarkable resemblance to AGE UK.   Though as far as I know they are not connected at all.   They have a staff team of 500, whose youthful looks don’t leave you thinking they have too many years of experience in life, nor in financial services.   They are the firm who advertise on TV.   But, also are economical about the size of their application fees.
  • DREWBERRY.  They have the usual blurb about the virtues of Equity Release and a ‘free Equity Release calculator’.   But, when you start to put in basic information — age, date of birth etc. —- it asks for a phone number, so that they can contact you and follow-up with the hard sell.   No phone number means you get no information about what loan you could receive !
  • ONE FAMILY.   But, a curious name for an Equity Release company, until you realise they are playing on the idea that the whole family can benefit from the early liberation of your wealth.   And before you know where you are you may have nothing left.    And of course the loan company will have most of it.  And the local agents will have their commission.
  • MORE 2 LIFE.   Same old spiel, although when I downloaded a brochure, it did have a few examples which told you a bit more.   So if you borrow £85,000, after 15 years you will owe £194,000 !    It also has a ‘free calculator’, but, again you have to give them your phone number before they will give you an answer !
  • PURE RETIREMENT.   Sounds good, who wouldn’t want a loan from them, especially when they claim to offer honest, simple solutions? But, when you download their brochure it is no more simple and honest as all the others, full of if’s and maybe’s. They may pay your fees, there again they may not.   Their ‘application and valuation fees are transparent from the start’, but, they won’t tell you how much they are.  That doesn’t sound very transparent to me.

I could go on with many more examples, but, it gets boring after a while trying to find some simple facts about Equity Release.    I guess that is what they all count on.

After hours of research on the internet, over a period of several weeks, I am still not much further on in trying to get some basic facts and figures about the cost of Equity Release.   I’ve ended up with a lot more questions than answers so I’ve got to keep digging.  

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3 Responses to Equity Release Pressure Sales Techniques

  1. ohoo erh! my lords ladies and gentlemen, comments will follow!

  2. Equality or is it equity equal money or my monies
    As a poor sailor of the “seven seas” I just wonder if I am reading about ‘Sindbad and the ‘tales o the Arabian nights’? or there again the sole survivor on the ‘Mary Celeast’ or just the deck boy who stood or stands on the burning deck while the ship sinks beneath me, and leaves me to talk to ‘Davy Jones’ in his locker, while all the sharks swim about me? Devouring my intgrity, or is it equity???
    John has done it again and lit the blue touch paper to my rocket, and I am left not going to church to repent my sins, but chasing up documents in ‘satan’s library’ on the internet.
    I am totally flummoxed as to what one does, or what one may consider as a honest “deal” with respect to Equity Release and ones main asset-a property to which one has the deeds too!
    Johns list/referral to 5 equity release providers, stirred me up, and I thought I had gone back to basics by looking at the following:
    1-. Department of Health Steering Group-Housing and equity June 2013-some 19 pages long.
    2-. Personal Care Savings Bonds;- A new way of saving towards Social Care in Later Life Oct 2014 by Les Mayhew and David Smith- some 33 pages long.
    3-.Using Investment Bonds to Pay for long term care. Some 7 pages long.: and finally,
    4-. Deprivation of assets in social care Fact sheet 40-’AGE UK’ September 2018 some18 pages long.
    That just for bedtime reading, for what is to be understood are the terms and conditions, under which equity release can be utilised for?
    Footnote
    As I the humble sailor understands equity release can be used for ‘releasing monies locked in a property for a ‘’term’’/period, and the proceeds of the agreed equity release should you die before the term go to your estate and your /ones property is surrender to the insurance company-benefactors?
    Should you survive the property remains with you? However you have to honour the repayments of the loan: or at least ones estate does [On this occasion you or your partner/dependants who have a title deed claim are duty bound to ‘’pay up’’ and smile.
    Now we come to the more recent developments in terms of equity release? And in the paper 1-. this is defined as ‘’UNIVERSAL DEFERRED PAYMENTS SCHEME. {dept health steering group]- Here one is dealing with residential care—- being transferred from Domicialary care. Here the point of contention is ‘How long is life expectancy for the reciever of in residential care’ Death has to be near at hand, so that the providers of funds/expenditure are guaranteed repayment for costs incurred in ‘residential care. At some £40.000 pounds projected for annual residential care provisions then with the talked about government ‘cap’ on support for residential care at £72.000pounds [I assume a lumps sum payment not annual?]- then life expectancy for a ‘’Universal Deferred payment is one and a half years-say??? unless you or one has as a sole survivor a property asset of value, then life expectancy?? It is a view point which in the short term may satisfy the need for residential care??
    CONCLUSION
    If one has equity release on the home in which they have a surviving partner, and they require domicile care for either one, or then one goes into residential care, one has to look hard at the financial future costs maybe , and at £40.000 PER ANNUM costs for residential care, and a possible partner who may require domicile care at say £500 pw., giving a total annual costs of some £26.000 pounds then with a combined partner residential care of £40.00 pounds in one year one has spent MOST of the governments £72K I.e.-[£40K +£26K==£66K].
    It is daunting, and one must look after ones health, mind and body, as some of the ailments such as Alhzmiers can persist for some 5 to 10 years! There being no known diagnosis which can guarantee freedom from the complaint, and then its termination in death.
    One is left as a younger person invoking some form of insurance cover for care in old age as an independent citizen in the commercial insurance industry. The state UK Government has had since early 1900’s and since 1948 the National Insurance contributions, and then the National Health Scheme. These monies are not long term investments, but monies collected as a tax, and not ‘ring fenced’ for specific services? Are we responsible for this/ theses policies as the voting public? We need our young and a healthy attitude to keeping an active working population who can support the UK’s ultimate Tax collect and the redistribution spend.
    For the current generation of UK Citizens who may be property owners, after the policies of Margaret Thatchers government they have been engaged in asset investment, rather than the General Life insurance products for providing assets which give/gave some protection against unforeseen expenditure in later life such as care in old age? For instance. Now we the the elderly live with decisions made politically in the 1980/90’s, and now we have to engage our younger working population to think and vote for policies for their future, when they come to the end of their personal working life.
    Here endeth the lesson!!
    But not the apprehension—paper 2-. above Personal Care Savings Bonds. The government think tank are introducing a lottery style aware towards ‘care costs in old age’ Please answers on a postcard please, Your thoughts are worth more than a 1st class postage stamp!!

    • john graham says:

      Well done David, you have had to do a lot of digging to even begin to consider this issue. You have raised a number of points which are currently being examined by the Government. Some may be discussed in the long awaited Green Paper.but I wouldnt hold your breath 🙂
      I am going to have a break from this subject for a while, but I will come back to it when I have done more research myself.

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