How to Spot Equity Release Companies to Avoid

Choosing the Right Equity Release Provider

Once you start looking into equity release, you’ll quickly realise there are plenty of providers out there. So, how do you pick the right one—and more importantly, how do you avoid the wrong ones?

This guide will help you spot the red flags, find a reputable provider, and make sure you’re getting the best deal for your needs.

What Is an Equity Release Company?

Equity release providers are the companies that actually lend you the money through a lifetime mortgage or a home reversion plan.

However, in most cases, you won’t deal with them directly. Instead, you’ll work with an equity release adviser or broker, who will help you find the best deal.

So, while looking at providers, it’s just as important to know how to choose the right adviser—and avoid the wrong ones.

Step 1: Is the Company Regulated?

The first thing to check is whether the company is:

• Authorised by the Financial Conduct Authority (FCA) – The FCA regulates financial services in the UK, ensuring companies play by the rules.
• A Member of the Equity Release Council (ERC) – The ERC sets industry standards and protects customers like you.

Most UK providers meet these standards, but always double-check before proceeding. You can:

• Search the FCA Financial Services Register to confirm the company is authorised.
• Check the ERC’s list of provider members to ensure they follow industry safeguards.

Why does ERC membership matter? Because ERC providers must follow strict rules that protect you. These include:

• The No Negative Equity Guarantee – You’ll never owe more than your home is worth, no matter how much interest builds up.
• The Right to Move Home – You can take your plan with you as long as the new home meets the lender’s criteria.
• The Right to Stay in Your Home for Life – Whether you choose a lifetime mortgage or home reversion, you’ll never be forced out.

All ERC members follow these protections, but some offer more flexibility than others—so always check the details of any plan you’re considering.

Step 2: Does the Company Offer the Features You Need?

Not all equity release plans are the same. Even if a provider follows ERC guidelines, their products can vary significantly.

Some key differences include:

• Enhanced lifetime mortgages – Some providers offer higher cash releases for those with health conditions, while others don’t.
• Interest repayment options – Some plans let you pay off the interest, so your loan never increases. Others won’t offer this feature.
• Drawdown flexibility – Some providers allow you to take money in stages rather than a lump sum, reducing the total interest charged.

Knowing what features matter most to you will help you choose the right provider.

Step 3: What Are the Fees?

Equity release providers all have different fee structures, so check the costs carefully before making a decision.

There are two key types of fees to look out for:

Set-Up Fees – These may include:

• Valuation fees
• Arrangement fees
• Completion fees

Ongoing or Potential Future Costs

• Early repayment charges – If you repay the loan early, some providers charge a hefty penalty, while others have more flexible terms.
• Additional withdrawal fees – If you have a drawdown mortgage, some lenders charge each time you take more money.

If paying off your plan early or keeping your options open is important to you, comparing provider fees is essential.

Step 4: Check Customer Reviews

One of the best ways to gauge an equity release provider is to see what their customers are saying.

For the most accurate and up-to-date reviews, sites like Trustpilot can be helpful. Here’s how some of the leading UK equity release providers are rated as of February 2025:

• Aviva – 4.3 stars
• Just – 4.6 stars
• Pure Retirement – 4.4 stars
• More2Life – 3.7 stars

Remember, though, that you may not deal directly with the provider. Many equity release lenders work exclusively through advisers or brokers, so choosing a good adviser is just as important as picking the right lender.

How Safe Is Equity Release?

Equity release is highly regulated in the UK, which means strong protections are in place for consumers.

Here’s what keeps you safe:

• The Equity Release Council’s protections – Including the no negative equity guarantee and the right to stay in your home for life.
• Mandatory financial advice – You must get advice from an FCA-registered equity release adviser before taking out a plan.
• Strict lending criteria – Providers must follow rules to ensure the loan is suitable for your situation.

A reputable adviser will always discuss the pros and cons of equity release with you. They’ll also check whether alternative options (such as downsizing) might be a better fit.

How to Avoid an Equity Release Nightmare

If you want to avoid being in your own equity release horror story and ensure you get the best plan for your needs, follow these simple steps:

• Only work with FCA-authorised and ERC member companies – This guarantees strong consumer protections.
• Make sure the product has the features you need – Whether it’s interest repayments, higher cash releases, or drawdown flexibility.
• Compare fees carefully – Some providers charge hefty early repayment penalties, while others are more flexible.
• Read customer reviews – See how other people’s experiences compare before committing.
• Get advice from a qualified equity release adviser – They’ll help you compare options and find the best deal for you.

The right adviser will be honest about whether equity release is right for you—or if another financial option would be a better fit.

Taking the time to choose wisely now could save you thousands of pounds in the long run and help you feel confident in your decision.

By following this guide, you can spot the equity release companies to avoid and find the right plan with peace of mind.