The equity release industry has not always been trusted. In fact, its reputation was once marred by stories of predatory lenders, compounding debt, and families left with little or no inheritance. While that stigma lingers in public perception, the reality in 2025 is very different. Today’s equity release market is tightly regulated, with strict standards designed to protect borrowers.
Central to this transformation is the Equity Release Council (ERC). The Council is an independent industry body that sets rules and safeguards for equity release products. It ensures that homeowners who release equity through lifetime mortgages are protected against the mistakes and abuses of the past.
This article explores the work of the Equity Release Council, the safeguards it enforces, and why these protections mean that modern equity release is safer, fairer, and more flexible than ever before.
The Equity Release Council was established in 1991 (originally known as Safe Home Income Plans, or SHIP). Its purpose was to bring credibility and security to a market that had been damaged by poor practice. SHIP introduced the first version of what is now the no-negative-equity guarantee, ensuring borrowers could never owe more than the value of their home.
Over the years, SHIP evolved into the Equity Release Council, expanding its remit to cover not only safeguards but also consumer education, industry standards, and adviser training. Today, membership of the ERC is considered the benchmark for professionalism in the sector.
The presence of the Equity Release Council provides reassurance to borrowers and their families. It means that anyone taking out an equity release product through a member firm benefits from a set of guarantees designed to protect their interests.
These safeguards address the biggest historical concerns: the fear of losing your home, being left with runaway debt, or being mis-sold a product you didn’t understand. By setting clear rules, the ERC ensures that equity release is now a transparent, carefully regulated option — not the risky gamble it once appeared to be.
The ERC’s safeguards are central to every modern lifetime mortgage. Let’s look at them in practice.
The No-Negative-Equity Guarantee
Perhaps the most important safeguard, this guarantee ensures that you will never owe more than the value of your property. If house prices fall or interest accrues over time, your estate will not be liable for any shortfall. The debt ends with the value of the home, protecting both the borrower and their heirs.
The Right to Stay in Your Home for Life
Borrowers cannot be forced to sell or leave their home, as long as they comply with the plan’s terms. This provides peace of mind, ensuring that equity release will not threaten security of tenure.
The Right to Move
Most ERC-compliant products allow you to transfer your lifetime mortgage to another property, subject to lending criteria. This flexibility is crucial, as many retirees choose to move closer to family, downsize, or relocate later in life.
Independent Legal Advice
Every borrower must receive independent legal advice before completing an equity release plan. This ensures full understanding of the contract and its implications, reducing the risk of mis-selling.
Transparency of Costs
ERC rules require products to have clear, transparent charges. Interest rates must be fixed or capped for life, and any early repayment charges must be disclosed upfront.
Together, these safeguards create a framework that protects borrowers at every stage of the process.
Consider a homeowner using a lifetime mortgage in 2025 to release £100,000 from their property. Under the ERC framework:
In short, every step of the process is designed to protect the borrower and their family.
Despite these protections, public perception of equity release still lags behind the reality. Many people still associate it with the horror stories of the past. That’s why education is so important. At Willow Private Finance, we often speak with clients who are surprised to learn how much has changed — and how many safeguards exist today.
Articles like our recent overview of equity release in 2025 are part of this effort, helping borrowers understand that the risks of old are no longer present in the same way.
It’s worth noting that ERC safeguards do not exist in isolation. Equity release products are also regulated by the Financial Conduct Authority (FCA). This means that no borrower can take out a lifetime mortgage without first receiving regulated financial advice.
Advisers must document why equity release is suitable, explore alternatives such as downsizing or retirement interest-only mortgages, and provide clear, personalised illustrations of how borrowing will impact equity over time.
The combination of FCA oversight and ERC safeguards creates a double layer of protection. Borrowers are not only shielded by product design but also by a regulated advice process that prioritises suitability and transparency.
These safeguards are not just good for borrowers, they are essential for the credibility of the industry itself. By eliminating the possibility of runaway debt, loss of tenure, or hidden costs, the ERC has restored trust in a market that was once considered unsafe.
As a result, equity release has become a mainstream product. More homeowners now see it as a legitimate way to fund retirement, make home improvements, or gift money to family. This credibility benefits lenders, advisers, and borrowers alike.
The Equity Release Council has played a pivotal role in transforming equity release from a product of last resort into a mainstream financial solution. Its safeguards, from the no-negative-equity guarantee to independent legal advice, ensure that borrowers are protected against the mistakes of the past.
In 2025, equity release is a safer, more transparent, and more flexible product than ever before. For homeowners considering unlocking the wealth in their property, the ERC’s standards provide reassurance that their interests will always come first.
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About the Author
Wesley Ranger is the Founder and Director of Willow Private Finance, where he also serves as a senior mortgage and protection specialist. With over 20 years of experience in the industry, Wesley has guided clients through every aspect of complex property finance. His expertise in later-life lending ensures that clients benefit from the safeguards offered by the Equity Release Council, making responsible, informed choices that protect both their present and their legacy.
Important Notice
Equity release and lifetime mortgages are regulated financial products. They may not be suitable for all borrowers and will reduce the value of your estate. Taking out a plan may affect your entitlement to means-tested benefits. Interest can accumulate over time unless payments are made, which may significantly increase the balance owed. Independent, regulated financial advice is mandatory before entering into an equity release agreement. This article is provided for general information purposes only and does not constitute personalised financial advice.
