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Equity Release Schemes

Volume 408: debated on Tuesday 7 October 2003

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If he will make a statement on the regulation of equity release schemes.[124654]

All mortgage-based equity release schemes will be regulated by the Financial Services Authority with effect from 31 October 2004. I announced on 5 June that an open consultation would take place in the autumn on whether home reversion plans should also be regulated by the FSA.

I thank my right hon. Friend for that reply. Given that these schemes are so important for pensioners—many of them are asset-rich but cash-poor—is the Treasury prepared to look at some options to provide further support or relief for equity release schemes where essential building repairs are required?

I shall treat that—as, no doubt, will my right hon. Friend the Chancellor—as an early Budget submission and it will be given careful consideration, as all such submissions are. On the wider point of consumer protection of the elderly, lessons have been learned from the failures of the '80s in relation to home income plans. In the light of the consultation on home reversion plans, I commend the work done by Age Concern with responsible members of the industry in setting up a code of practice under the safe home income plan scheme. That gives my hon. Friend's constituents and many others the sense of security and certainty to which they are entitled in their old age.