A good story here in the Telegraph about the cosy relationship between Age UK and Hub financial (owned by Just Group). Behind a paywall, but in summary, a couple took out an equity release mortgage with Just (then Just Retirement) in 2012. They were told the service was ‘the Age UK equity release service provided by Just Retirement Solutions’, and the advisor’s identification would show as ‘Age UK’. In reality, the advisor was wholly employed by JRS and had nothing to do with Age UK. The customers took out a £300k loan (which would now be worth nearly £470k).
The couple now want to change the loan to one with a cheaper rate, which will cost them £30k. Yet the advisor supposedly told them (in 2012) that gilt rates would move in their favour (i.e. go up) over the next few years, so they would face no early repayment charges.
Of course it would seem natural in 2012 to think that rates, then at a long term low of around 3%, would go up. Just as natural as thinking, in 2019, that house prices will continue to rise at 3-4% a year for ever, the assumption which is the basis of the entire equity release market.