Help with Bad equity release scheme

fliffer

Can anyone offer any suggestions?

My elderly father (who cared for my mother)recently suddenly died and when wading through paperwork, we found details of an equity release scheme that is most unfair, meaning that my mother will only own 57% of the total sale of the house, resulting in the insurance comany recieving £140,000(approx) for giving my father £20,000 in 1998. This will seriously affect the level of care she can recieve and seems grossly imoral and finacially unfair
If anyone knows how we can reclain some of this money on the sale of the property, i would be really grateful.

Petmidget

Most equity release scheme are bad, probably only suiting those who are single and have no wish to leave a property to their hiers.

Your only recourse afaik would be to attempt to prove the policy was missold, this would still leave you having to repay the initial capital and potentially interest (assuming they hold a fixed % rather than a loan style release scheme).

Was the property in your fathers sole name, is there any provision for residency of the surviving spouse. I would say get some free legal advice, CAB or pro bono solicitor in the first instance.

Ian_W

You might also consider Age Concern re advice, their helpline number is:
0800 00 99 66
their website is:
https://www.ageconcern.org/

I don't think equity release schemes were regulated by the FSA until a couple of years ago so proving a mis-sale before the F Ombudsman, like with endowments, isn't likely to be an option. AFAIK you can only do that in respect of regulated financial services.

You're probably aware there are 2 types - a lifetime mortgage where the interest in effect "rolls-up" or a reversionary scheme where a % of the property is effectively sold to the lender/insurer and that % belongs to them when the property is eventually sold. In respect of the former, though I suspect this isn't a lifetime mortgage, there may be some mileage if the interest rate is exceptionally high but you would need legal advice. If it is the latter then I'm not sure there is an awful lot you can do other than if they're a household name type of company appeal to their better nature/fear of adverse publicity.

I'm sorry to say but with hindsight your Dad made a bad decision. If it was the latter type of scheme it is mitigated by the fact he probably couldn't have foreseen UK house prices rising by 175% in 8/9yrs especially as house prices had stagnated and dropped by up to 30% in the first half of the 90's. In fairness neither could the lender and the offer, which your Dad accepted, would have been based partly on then recent house price history.

I'm sorry I can't be more encouraging, especially as your mother is likely to be disadvantaged at a time in her life when she shouldn't be. Hope you find a solution.