Equity release, where people sell their home for a long-term income, has often been promoted as a way to provide money for long-term care.
This has always been a dubious claim, as it was never the purpose of the product. So concerned was this site on the over-promotion of it for care payment, that before the economic crisis, we removed equity release product details from our long-term care section.
Now, the bubble has burst on equity release. Northern Rock has become the latest provider to leave the equity release sector by pulling its lifetime mortgage range. This adds to the growing list of providers and advisers who have been forced out of the sector in recent months. Last week Saffron Building Society revealed it was to cease lending lifetime loans for the rest of 2009, following both Coventry Building Society and Retirement Plus decisions to temporarily cease lending. Advisers In Retirement Services went into administration in August and Newcastle Building Society temporarily ceased equity release last month.
Long term care: News update: 08/10/2009