Equity IQ anyone?

Onawingandaprayer

Just caught the middle bit of an item on Moneybox about a new (sort of) equity release scheme called Equity IQ.

Anyone know anything about it? Googled it and couldn't find anything relevant. It seemed to suggest it was aimed at houseowners who had paid off their mortgages. It runs in 3 year chunks and involves large insurers taking over half the value of your home and paying you a monthly income. At the end of each 3 yr period, you can opt out.

Never heard whether Moneybox thought it was good, bad or downright dodgy.

Anyone any the wiser?

LittleVoice

The final comment on Money Box was that it probably wouldn't work for the insurance companies trying to use the scheme if they tried it - it was trying to boost their balance sheets by using other people's property.

They also said that if a houseowner was considering the scheme they should seek legal advice.

cheerfulcat

Onawingandaprayer wrote: »

Never heard whether Moneybox thought it was good, bad or downright dodgy.

Anyone any the wiser?

Not really! It was all very vague. There is a thread on the Pensions board, here, which goes into a little more detail. It sounds like a mis-selling claim in the making to me...

ben_armstrong

Agreed it was pretty vague and it seemed that they were wating to find out more about the scheme.Does the company have a website that anyone is aware of ?

missile

You can hear the Moneybox programme on iPlayer

Coltai

Onawingandaprayer wrote: »

Just caught the middle bit of an item on Moneybox about a new (sort of) equity release scheme called Equity IQ.

Anyone know anything about it? Googled it and couldn't find anything relevant. It seemed to suggest it was aimed at houseowners who had paid off their mortgages. It runs in 3 year chunks and involves large insurers taking over half the value of your home and paying you a monthly income. At the end of each 3 yr period, you can opt out.

Never heard whether Moneybox thought it was good, bad or downright dodgy.

Anyone any the wiser?

I have been approached about this and have the details. They have also asked me to be an agent. On the face of it seems quite feasible but has that too good to be true feel to it. Consequently the FSA are checking it out for me. Sent the details yesterday after speaking to one of their advisors. I wouldn't want to be involved if it is not above board.

I will let you know what they report back. I hope it is okay because I can see lots of potential for it!

masonic

From what I understand, this is a way for unscrupulous insurance companies with insufficient assets to sell policies it would otherwise be illegal for them to sell under new EU legislation. There may be no risk to the people who 'lend' the insurers their property in this way, but we the taxpayer may be at risk from this little scheme if these insurance companies start to fail. Hopefully, the EU are unlikely to just sit back and let this happen. If insurance companies don't have the collateral to back their policies, somebody is going to lose out in the end.

joerugby

In my view the best way to release equity is to sell your house and buy a cheaper one.

Reaper

I just listened to the Moneybox program on iPlayer. Well worth a listen for those interested.

Despite the signing up of many IFAs and agents no UK insurer has yet agreed to take part, probably because it seems highly unlikely it would benefit them even if they did.

I'm not convinced it will ever get launched. So 350 IFAs have been trained for a non-existant product? Did they have to pay for that training...?

maximuss_2

"From what I understand, this is a way for unscrupulous insurance companies with insufficient assets to sell policies it would otherwise be illegal for them to sell under new EU legislation. There may be no risk to the people who 'lend' the insurers their property in this way, but we the taxpayer may be at risk from this little scheme if these insurance companies start to fail. Hopefully, the EU are unlikely to just sit back and let this happen. If insurance companies don't have the collateral to back their policies, somebody is going to lose out in the end".

The Insurance Companies are at least double "A" rated.

Think of it this way. If your bank won't lend money to you at this time because they are trying to build up the reserves necessary for them to continue in business, it might cause you a problem. If your insurer could not insure you or your home or provide investment plans, this could cause you a problem.This arrangement creates the enviroment for the insurer to provide such products under solvency II. We dont know the full facts yet but to call the insurance companies unscrupulous is a little unfair. If this plan becomes available and it meets with the E.U criteria and the Government dont have a problem with it, why would it be wrong for someone in need of additional income to enter into a mutually beneficial arrangement. Everyone will receive a contract and a cooling off period. They will have the opportunity to consult legal advice. Wait and see, I will be the first to say run a mile if this is not what it has been promised to be.

masonic

maximuss wrote: »

The Insurance Companies are at least double "A" rated.

I think we've all learnt in the past year or two that high ratings are not a mark of safety where dodgy practices are afoot.

Think of it this way. If your bank won't lend money to you at this time because they are trying to build up the reserves necessary for them to continue in business, it might cause you a problem. If your insurer could not insure you or your home or provide investment plans, this could cause you a problem.This arrangement creates the enviroment for the insurer to provide such products under solvency II. We dont know the full facts yet but to call the insurance companies unscrupulous is a little unfair. If this plan becomes available and it meets with the E.U criteria and the Government dont have a problem with it, why would it be wrong for someone in need of additional income to enter into a mutually beneficial arrangement. Everyone will receive a contract and a cooling off period. They will have the opportunity to consult legal advice. Wait and see, I will be the first to say run a mile if this is not what it has been promised to be.

What is being proposed here is insurance companies putting somebody elses assets on their books for the purpose of getting around regulations ultimately designed to protect the public from irresponsible practices by the said insurance company. That, to me, is unscrupulous.

For the avoidance of any doubt, I take what has been promised to the homeowner at face value. It's entirely plausible that they won't be putting themselves at risk... except that most of them will be taxpayers and some could become customers of insurance companies that get involved in this scheme, so they could still get burned if the house of cards comes crashing down.

To be honest, to me the mere idea of something like this is exasperating. The dust has hardly settled on the last financial crisis and it's beginning to seem like these people are gearing up for the next one. :wall:
How about we all calm down and act responsibly, just for a little while, huh?