Cable Calls for Tough Measures

4.37.36pm BST (GMT +0100) Fri 6th Jun 2003

Ministers have been urged to speed up a Treasury investigation into the growing number of pensioners resorting to drawing down on the equity in their homes to survive.

Liberal Democrat trade spokesman, Vince Cable, called for tough regulatory measures to be introduced without delay.

" As the pensions crisis bites harder, it is inevitable that more "

"pensioners will turn to these schemes to unlock the equity invested in their homes. With pensioners among the most vulnerable in society, protecting their interests must be paramount, " Mr Cable said.

"It is unacceptable that the sale of some mortgage products will be regulated, but equity release reversion schemes will not. The Government's lack of foresight directly threatens hard-up pensioners and risks another mis-selling crisis."

"This has been a live issue since the Government decided to regulate certain mortgage products three years ago. Like always with Labour, the Government proceeds at a snail's pace, while pensioners take the risks."

"Home owners can release value from their investment with equity release products."

"They can either take out a mortgage repayable on death or sell part of the equity in return for the right to occupy the property until death."

"Ministers estimate the value on the reversion products equity release market to be £250m.