FirstStop has been giving older people information and advice about equity release since it was set up in 2008.
Equity release is the focus of one of the performance targets set FirstStop by the Department for Communities and Local Government (DCLG) and the organisation has worked closely in promoting Houseproud – the service delivered by Home Improvement Trust (HIT) – and is one of two national partners in the promotion of the Home Cash Plan.
This is designed to appeal to low-income home owners with little or no impact on claiming pension credit. It was developed by Just Retirement as part of a pilot scheme co-ordinated by the Joseph Rowntree Foundation (JRF), with advice given by Just Retirement Solutions.
So what can we learn from our experience so far? At the beginning, information and advice on equity release was delivered over the web, phone and email but since November 2009 we have delivered face-to-face advice and undertaken complex casework through local partners.
Since January 2010, 980 people have been advised on equity release options for funding improvements to their homes. In that period, 70 people have been referred on to the Houseproud scheme, run by HIT, and between May 2010 to November 2011, 46 referrals were made to Just Retirement Solutions for advice. Since October 2010 there have been more than 1,300 visitors to the equity release webpage and our local partners have handled enquiries that have seen two Wessex Home Improvement loans completed.
The biggest growth areas now for using equity release are paying off other debts and raising funds for care fees. Arranging money to repair or adapt the home is the core of the Houseproud service and the main focus of Home Improvement Agencies (HIAs). However, the low conversion rate of FirstStop customers from interested enquirers to completion is, unfortunately, symptomatic of a wariness of this type of financial, house-based product on the part of many older people.
To assess the obstacles to take-up of these products, the Joseph Rowntree Foundation has recently published a report on the progress of the Home Cash Plan pilot. This found that:
• The three local authorities – Maidstone, Islington and Kensington and Chelsea – that piloted the scheme, referred only 20 enquiries, although 250 people received training and it was extensively promoted over 18 months to July 2011. Half the people referred received a "sound solution", financial advice which met their needs but did not necessarily involve equity release.
• The poor reputation of equity release is deeply embedded among people who might have drawn attention to it.
• It is difficult to get older home owners on low incomes to consider equity release, however good an option it may be • The pilot led directly to the roll out of the product through Age UK and FirstStop, generating 1,200 enquiries in the first nine months.
• Local authorities, with new wellbeing powers, should consider how they collect data on their populations to understand more about the needs of people they have little contact with.
In summary, equity release is no silver bullet but it can improve the quality of life of some older people. However, national promotion is required by organisations committed to training staff to give people the choice of specialist financial advice.
Daniel Pearson is the director of FirstStop
