Equity Release - action groups

Pollycat

HillStreetBlues said:

MattMattMattUK said:

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

That's too general. There will be people that won't have understood the full ramifications.
That's why everyone should take independent  advice of taking out those kind of products, sadly not everyone does.

But whose fault is it if people don't take advice before signing up?
Where is personal responsibility in this?

The OP was asked for more information on his earlier thread but never returned to that thread.

The OP may find this link useful:
Equity release: Financial Ombudsman Service (financial-ombudsman.org.uk)

born_again

DavidWalls said:

Does anyone know if there are any campaigning groups that help address the rip off Equity Release? My parents signed a deal 15+ years ago at a fixed rate of 8%. Effectively, they've sold their home for £35k. 

What an utterly wretched product. As bad as Payday Loans and the PPI scandal. 

Are your parents unhappy? 
As in reality they are the only ones who might have any complaint. 

DullGreyGuy

Aylesbury_Duck said:

MattMattMattUK said:

DavidWalls said:

Does anyone know if there are any campaigning groups that help address the rip off Equity Release? My parents signed a deal 15+ years ago at a fixed rate of 8%. Effectively, they've sold their home for £35k. 

What an utterly wretched product. As bad as Payday Loans and the PPI scandal. 

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

Presumably a retrospective application of interest rates over the last 15+ years and a re-assessment of property value.

It would be a lovely precedent to apply to my savings, investments, mortgages, investments and insurances over the last few decades.  I could be owed thousands!  Is there an action group for the fixed rate mortgage I was sold in 1997 that turned out to be a pup because rates fell as soon as it was signed?  And that life insurance I took out at the time is still going, it's been useless because I'm still here.

Or you could owe thousands

LTMs are not my area of strength but I believe there are variable rate ones too and so its down to the customer if they want the certainty of a fixed interest rate or risk a return to a BoE 17% base rate plus the margin on top of that. 

HillStreetBlues said:

MattMattMattUK said:

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

That's too general. There will be people that won't have understood the full ramifications.

The ramifications are that their benefactors of their estate will get less but presumably these are the same people that didnt rally round to find another way to give their parents etc the £35k they felt they needed at the time. 

Aylesbury_Duck

DullGreyGuy said:

Aylesbury_Duck said:

MattMattMattUK said:

DavidWalls said:

Does anyone know if there are any campaigning groups that help address the rip off Equity Release? My parents signed a deal 15+ years ago at a fixed rate of 8%. Effectively, they've sold their home for £35k. 

What an utterly wretched product. As bad as Payday Loans and the PPI scandal. 

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

Presumably a retrospective application of interest rates over the last 15+ years and a re-assessment of property value.

It would be a lovely precedent to apply to my savings, investments, mortgages, investments and insurances over the last few decades.  I could be owed thousands!  Is there an action group for the fixed rate mortgage I was sold in 1997 that turned out to be a pup because rates fell as soon as it was signed?  And that life insurance I took out at the time is still going, it's been useless because I'm still here.

Or you could owe thousands

I hereby withdraw my name from the action group 

Aylesbury_Duck

DullGreyGuy said:

The ramifications are that their benefactors of their estate will get less but presumably these are the same people that didnt rally round to find another way to give their parents etc the £35k they felt they needed at the time. 

Ouch.

I asked about the property purchase price, because I am part of one of the fortunate generations that are now sat in houses worth many multiples of purchase price, having done literally nothing to earn that enormous increase in equity way beyond inflationary levels.  If I was to obtain 20% of my house value in equity release, it would still be more than the purchase price all those years ago.  

DullGreyGuy

Aylesbury_Duck said:

DullGreyGuy said:

The ramifications are that their benefactors of their estate will get less but presumably these are the same people that didnt rally round to find another way to give their parents etc the £35k they felt they needed at the time. 

Ouch.

I dont get the sense of entitlement people have for inheriting from their relatives and parents in particular. 

I'm estranged from my widowed mother but I'd be jolly happy to hear that she'd spent every last penny of her money on holidays, champagne, gigolos or whatever else makes her happy. Ideally there are two sentimental items of my fathers that have no significant material value that'd be nice to have but wont be the end of the world if she's sold them. 

HillStreetBlues

DullGreyGuy said:

HillStreetBlues said:

MattMattMattUK said:

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

That's too general. There will be people that won't have understood the full ramifications.

The ramifications are that their benefactors of their estate will get less but presumably these are the same people that didnt rally round to find another way to give their parents etc the £35k they felt they needed at the time. 

Couldn't it also impact if they wanted to move?
Some parents are very private about their finances (not saying that's wrong)  so other family members might not have been given the option to help.

HillStreetBlues

Pollycat said:

HillStreetBlues said:

MattMattMattUK said:

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

That's too general. There will be people that won't have understood the full ramifications.
That's why everyone should take independent  advice of taking out those kind of products, sadly not everyone does.

But whose fault is it if people don't take advice before signing up?
Where is personal responsibility in this?

PPI was not only mis-sold it was mis-bought.

People were allowed to buy polices that were of no use to them.
If they had taken independent advice they wouldn't have bought the policy,  but many of them still got refunds.

DullGreyGuy

HillStreetBlues said:

DullGreyGuy said:

HillStreetBlues said:

MattMattMattUK said:

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

That's too general. There will be people that won't have understood the full ramifications.

The ramifications are that their benefactors of their estate will get less but presumably these are the same people that didnt rally round to find another way to give their parents etc the £35k they felt they needed at the time. 

Couldn't it also impact if they wanted to move?
Some parents are very private about their finances (not saying that's wrong)  so other family members might not have been given the option to help.

Talking about modern plans as have only been really aware of them for the last 6 years or so... it certainly can impact if they want to move but it all depends on the size of the loan at that time, the value of the new property (and its suitability for mortgage) etc and the terms of the loan.

Most now have a "downsizing protection" which will allow you to transfer the mortgage to the new property, if there isnt the headroom to achieve the required LTV then you can part repay the loan to get it to fit and not pay any early redemption charges.

Pollycat

HillStreetBlues said:

Pollycat said:

HillStreetBlues said:

MattMattMattUK said:

People signed up in full knowledge of what they were signing up to and how the product worked. The power of compound interest is well known and so over 15+ years it's impact was going to be obvious. What kind of "action" do you expect to be taken?

That's too general. There will be people that won't have understood the full ramifications.
That's why everyone should take independent  advice of taking out those kind of products, sadly not everyone does.

But whose fault is it if people don't take advice before signing up?
Where is personal responsibility in this?

PPI was not only mis-sold it was mis-bought.

People were allowed to buy polices that were of no use to them.
If they had taken independent advice they wouldn't have bought the policy,  but many of them still got refunds.

What evidence do you have that this equity release was mis-sold?