By Clare Yates
6 min read
If you’re thinking about using equity release to free up money from your home, it’s reassuring to know that this protection is in place. Whether you’re looking to top up your retirement income, fund home improvements, or help family financially, knowing you’re protected can offer real peace of mind.
This guide breaks down how equity release is regulated, what that means for you, and the key organisations looking out for your interests.
Why is regulation so important with equity release?
Choosing equity release is a significant financial decision that could affect not only yourself, but also those close to you.
With the most popular form of equity release, a lifetime mortgage, you take out a loan that is typically repaid via the sale of your home when you pass away or move into long-term care. This means it’s likely that there will less proceeds from the sale of your home to leave to loved ones.
Also, because you may decide not to make any repayments of the loan or interest payments until your home is sold, the overall amount owed grow considerably. There are cheaper forms of lending, although these may not be available to you.
For these reasons, the financial service industry recognises that taking out an equity release plan needs to be a very carefully considered decision. That’s why so much work as gone into protecting you from making a mistake should you opt for this form of finance.
The regulations and standards in place are there to help you make an informed decision after understanding the pros and cons of equity release. Their aim to make sure that you receive appropriate and honest advice, and that you are treated fairly throughout the process.
With that background explained, let’s now look at what regulation of the equity release sector looks like.
The Financial Conduct Authority (FCA)
The FCA is the UK's financial watchdog. They regulate the financial services industry and ensure that firms act in the best interests of consumers.
Anyone giving you advice about equity release or selling you a plan, whether it’s an adviser, broker or lender, must be FCA-authorised. This means they’re legally required to follow strict rules about how they deal with you and what kind of advice they provide.
When offering equity release advice, regulated firms must:
Check that the product is genuinely suitable for your personal circumstances.
Explain how equity release could impact your tax position and benefit entitlements.
Consider whether other options (like downsizing or using savings) might be more appropriate.
Understand your goals, for example whether you want to leave an inheritance.
Factor in your future plans, such as the likelihood of needing to move.
If you're ever unsure, you can check whether a firm or adviser is authorised by visiting the FCA Register.
The Equity Release Council
In addition to FCA regulation, many professionals in the industry also follow voluntary standards set by the Equity Release Council. This is a respected trade body that’s been supporting customers and promoting best practice since 1991.
The Equity Release Council’s Standards offer added protections, particularly around:
Security of tenure: You have the right to stay in your home for life or until you need long-term care.
Portability: You can move to a new property and take your equity release plan with you, as long as the new home meets your provider’s criteria.
No negative equity guarantee: You or your estate will never owe more than your home is worth, even if property values fall.
Clear interest terms: Interest must be either fixed for life or, if variable, capped with an upper limit.
Voluntary repayments: You’re allowed to make partial repayments without early repayment charges
Long-term care: If you need to move permanently into long-term care (either in a care home or with relatives providing care) any early repayment charge will be waived by the lender, once they have a medical practitioner’s certificate, and as long as the terms and conditions of the loan have been met.
Council members also commit to providing clear, easy-to-understand information about your plan, covering everything from fees and repayment terms to tax and inheritance considerations.
When choosing a provider or adviser, it’s highly recommended to work with someone who is a member of the Equity Release Council. At Compare More, we only partner with advisers who are Council members.
The Financial Ombudsman Service and Financial Services Compensation Scheme
Even with safeguards in place, it’s important to have people looking out for your interests if you're not happy with the service you’ve received from an equity release adviser or product provider.
The first layer of protection if you have a complaint is from the FCA. All FCA-regulated firms must have a clear complaints process. If you raise a concern, they’re required to respond promptly and resolve the issue within eight weeks at most.
If you’re not satisfied with the response you get, or you don’t get one at all, you can take your complaint to the Financial Ombudsman Service. This is an independent body that helps settle disputes between consumers and financial firms.
In addition, the Financial Services Compensation Scheme acts as a financial safety net if a firm you’ve dealt with fails and you lose money as a result. This could include bad advice given by a broker or adviser who has since gone out of business.
We hope that you never need to make a complain in relation to an equity release plan. But if you do, it’s good to know that there are these established processes in place.
Protection starts by talking to an authorised adviser
Speaking to an adviser who is both FCA-authorised AND a member of the Equity Release Council is essential. They’ll look at your full financial picture and help you decide whether equity release (or an alternative) is the right move.
At Compare More, we only partner with advisers who are authorised by the FCA and who are members of the Equity Release Council. There is no cost to speak to an adviser and the initial advice is free and with no obligation. It is only when your release completes that you will pay an advice fee, which will be agreed and disclosed to you before you proceed and release any equity.
Additional costs can include the lender’s arrangement, application or valuation fees, and your solicitor’s fees for handling the legal side of the process. You will often be able to pay your adviser, provider and solicitor fees from the amount you release, so you won’t have to pay them upfront.