A brief history of equity release
Equity release plans were first introduced into the UK in 1965. The first income plan based on an annuity and a mortgage was issued in 1972, followed by a cash reversion plan in 1978. The market for equity release proved very popular until unsafe schemes including investment bond plans and roll-up plans with variable interest rates started to appear in 1988. These plans left many elderly people in financial difficulties and were banned in 1990.
SHIP was launched in 1991 to promote safe plans and to safeguard the interests of customers via a code of conduct for the industry. Its aim is to ensure that a repeat of the scandals of the late 1980s never occur again.
In 2004, lifetime mortgages became a regulated product under the Financial Services Authority (FSA). Home reversions became regulated in 2007.
More than £1bn in equity release loans was taken out by customers in 2008 and this figure is expected to grow significantly over the next few years.