Equity release

MrsRGoth

Just looking for opinions to see if I can realistically take forward an equity release complaint for my family. 

My grandad borrowed 20k for retirement to do some home improvements and buy a car.  At the time the house was owned in full and valued at £150k. 

My grandad died and now my nan has recently passed away. 

My mum is selling the house and valued at £180k with the current equity release balance owed at £150k and increasing at £1500pm in interest. 

We have sought legal advice and been told although contract legally binding it is obviously morally wrong. 

My grandad would be so upset as he didn’t understand this would happen and have notes he made himself working out what he thought would be left when he passed away so I do believe it was mis sold. 

Can I do anything or just have to accept they have been robbed? 

Any help greatly appreciated. 

[Deleted User]

Why do you think it was morally wrong for your grandparents to release equity from their home?


Reducing any remaining inheritance doesn't mean either your grandparents or the company have robbed anyone.

MrsRGoth

I just think it’s an extortionate amount of money to repay for originally owing £20,000. 

It’s not about the inheritance. My mum doesn’t need the money but to think you borrow £20k and pay back all that is terrible in my opinion. 

And why doesn’t the interest stop when both parties have deceased. It shouldn’t be still going up now. I think that’s really unfair. 

[Deleted User]

But it all depends on the rate and the length of time of the loan.  Remember that no repayments have ever been made, so the interest builds on the full amount. 


The interest will continue to build until settled. That's normal.  The idea is that you settle it from the sale of the house. If you choose not to, then you'll be incurring further interest.

MrsRGoth

I just think the were given the wrong advice as for the amount they borrowed and for the purpose they could of got a bank loan and repaid over a few years. If they had chosen to take a lot more of the equity to benefit from that money when they were alive then that would be understandable. 

They had a pension income at the time and could of been eligible for a personal loan rather than equity release. 

[Deleted User]

You have no way of knowing if they would have been eligible for a loan though.  And certainly not for 20k.

Nearlyold

At that interest rate it would have taken 16 to 17 years to build up a debt of £150K. A house worth £150K 16 to 17 years ago might reasonably expected to be worth around £215,000 to £230,000 today.
The fact that your grandad had made notes working out how much would be left over on repaying the loan after their passing  would indicate that he had some understanding of how equity release worked. 

susleggott

The equity release advisor should have kept records of their correspondence with your grandad in case of anything like this (ie upset relatives, possible complaint) happening after his death. Your mum could contact them and ask, you might then have a clearer picture of whether or not you have grounds for complaint.  

dunstonh

My grandad would be so upset as he didn’t understand this would happen and have notes he made himself working out what he thought would be left when he passed away so I do believe it was mis sold. 

For many many years now, equity release has required you to get legal advice.   The solicitor makes sure that the person is able to understand it.

So, are you suggesting that the solicitor failed to do their job?

Also, it is possible to bypass advisers with equity release.  So, did your grandad seek advice or go direct (direct is non-advised and they will act on instruction.  It also means no shopping around as the adviser does that).

Onlooker2

The Financial Conduct  Authority,FCA, have been looking at the Equity Release market since July.You can view their enquiry findings on their website and if you feel you need to you can lodge a complaint with regard to the providers conduct in this matter.Anyone can do the same..

dunstonh

Onlooker2 said:

The Financial Conduct  Authority,FCA, have been looking at the Equity Release market since July.You can view their enquiry findings on their website and if you feel you need to you can lodge a complaint with regard to the providers conduct in this matter.Anyone can do the same..

What makes you think the provider has done anything wrong?
There is insufficient information to a) see if there is anything wrong and b) who is responsible.
Firing off a complaint to the provider seems a bit daft at this stage.