Equity Release Companies to Avoid in 2025: 8 Warning Signs

Equity release is a way for older people to get money from their home without having to sell it. It’s a big choice, so it’s normal to feel a bit unsure about which company to trust.

Some companies are great, but others might not have the best intentions. So how do you figure out who’s trustworthy?

Don’t stress—it’s a common question. Plus, financial decisions can feel tricky, even for adults.

Luckily, most equity release companies are trustworthy, but knowing how to spot a few warning signs can save you from trouble later.

This guide is here to show you what to look for so you can feel confident and make the best choice for your situation.

Which Equity Release Companies to Avoid in 2025?

Spotting the equity release companies to avoid in 2025 isn’t too hard if you know what to look for. Here are some red flags to watch out for:

• Loads of negative customer reviews (but keep in mind, people are often quicker to complain than praise online).
• Dodgy or unethical practices.
• Lack of clear and honest communication.
• No regulation by the Financial Conduct Authority (FCA).
• Not being a member of the Equity Release Council (ERC).

Warning Signs & Reasons to Stay Away

If you come across an equity release company showing any of these behaviours, it’s probably best to steer clear:

• Ignoring key industry regulations or skipping important certifications.
• A bad reputation or consistently poor feedback.
• Sneaky fees like high early repayment charges or hidden costs.
• No safeguards like a “No Negative Equity Guarantee” or Downsizing Protection.
• Not allowing you to make voluntary interest or partial repayments.
• Using pushy sales tactics or misleading ads.
• Overlooking your personal circumstances and financial goals.
• Refusing to let you move or transfer your plan.

These warning signs indicate that a company may not be acting in your best interests. 

If you see any of these signs, it’s best to avoid the company and seek advice from a qualified financial advisor. 

Why Some Companies Aren’t Worth Your Time

Let’s dig a little deeper into why some equity release companies should be avoided.

Ignoring Rules and Skipping Accreditations

Companies that don’t follow the rules or secure proper accreditations can be risky to deal with. 

Organisations like the Financial Conduct Authority (FCA) and the Equity Release Council (ERC) exist to protect consumers and encourage fair practices in the equity release world. 

If a company isn’t regulated or endorsed, there’s a higher chance they could:

• Cut corners with customer service.
• Act unethically.
• Leave you without proper safeguards.

How the FCA Protects You

The FCA works hard to protect borrowers, especially when it comes to complex products like equity release. Here’s how they help:

• Keeping an eye on providers and brokers to make sure they’re fair and honest.
• Only licensing firms that meet strict standards.
• Regularly checking up on regulated companies.
• Taking action (like fines or licence removals) if firms break the rules.
• Providing tools and info to help you make smart decisions.
• Resolving disputes through the Financial Ombudsman Service.
• Making sure borrowers get clear advice, transparent terms, and proper complaint handling.
• Encouraging competition to give consumers more choices.

While the FCA has your back, it’s still a good idea to protect yourself. 

Take time to read the terms, ask for professional advice, and understand what you’re signing up for. Being informed can save you a lot of trouble down the line.

>> Check regulated lenders here.

Equity Release Council Role

The Equity Release Council (ERC) is an independent group that keeps an eye on the equity release industry in the UK. 

Their goal? To make sure everyone plays fair and keeps high standards. Here’s what they do to protect you:

• Members must follow strict rules that go beyond basic regulations, giving you extra peace of mind.
• They set product standards like the “No Negative Equity Guarantee” to help keep your finances safe.
• They require members to offer professional financial advice so you can make smart choices.
• They make sure customers get clear and detailed info to help with decision-making.
• Their Member Code of Conduct pushes for honest advertising, fair practices, and great advice.
• If a company breaks their rules, customers can take action—and it might even lead to disciplinary steps.
• They also teach people about equity release products and their rights to help them make well-informed decisions.

While the ERC does a lot to keep things in check, you’ve still got a role to play. Take the time to learn about your options and make choices that work best for you.

Some ERC Member Providers:

• More2Life
• Pure Retirement
• Canada Life
• Just Retirement
• One Family
• Liverpool Victoria (LV=)
• Scottish Widows
• Legal & General
• Aviva
• Standard Life
• Hodge
• Retirement Bridge Group
• Responsible Lending

Pro Tip: Always pick companies regulated by the FCA and offering plans that meet the ERC’s standards. It’s a great way to protect yourself from dodgy deals.

Avoid Companies with a Bad Reputation or Poor Track Record

A company with a bad reputation or a history of poor performance is a big red flag. 

Before you commit, do some digging and check out customer reviews. See what others are saying about their experiences.

Here are some signs to keep an eye on:

• A ton of negative reviews.
• Complaints that haven’t been resolved.
• A history of shady or unethical behaviour.

If you spot any of these, it’s best to look elsewhere. There are plenty of trustworthy equity release providers out there, so there’s no need to take unnecessary risks.

Watch Out for High Early Repayment Charges or Hidden Fees

Hidden fees and steep early repayment charges can seriously hurt your finances. Whether you want to pay off your loan early or face unexpected costs, these charges can add up fast.

Choose a provider with clear, upfront pricing. If a company isn’t open about their fees, that’s a big warning sign. 

You should easily understand all costs involved, including early repayment charges and other fees, before signing up.

No Negative Equity Guarantee or Downsizing Protection Clause

If an equity release company doesn’t offer a “No Negative Equity Guarantee” or Downsizing Protection, that’s a big warning sign. These features are key to keeping your finances safe.

• No Negative Equity Guarantee: This ensures that you (or your heirs) won’t owe more than your home’s value, even if the sale doesn’t cover the equity release debt.
• Downsizing Protection: This gives you the freedom to move to a smaller home and clear the loan without heavy penalties if your lifetime mortgage can’t be transferred.

Pro Tip: 

Stick to companies that are members of the Equity Release Council. 

Membership means you’ll get a No Negative Equity Guarantee and possibly Downsizing Protection, giving you added peace of mind.

Choosing an Equity Release Company with Flexible Repayment Options

If a company doesn’t let you make voluntary interest or partial capital repayments, it might not be the best choice. 

Flexible repayment options help you manage your loan better and could lower the total interest you’ll pay.

In March 2022, the Equity Release Council introduced a new standard. 

All new lifetime mortgages must now offer options for voluntary payments and interest repayments. 

This change gives borrowers more control over their loans, so be sure to choose a provider that follows this standard.

Spotting High-Pressure Sales Tactics and Misleading Ads

Watch out for these common tricks:

• Time-limited offers: Pressuring you to decide quickly by saying the deal is about to expire.
• False promises: Making unrealistic claims or guarantees about returns.
• Scare tactics: Trying to frighten you by saying equity release is your only option or that you’ll lose your home if you don’t act fast.
• Misleading info: Giving you incomplete or incorrect details about products or fees.

Tips to Avoid High-Pressure Sales

• Be cautious of unsolicited advice. If a company contacts you out of the blue, it’s a red flag.
• Stick to Equity Release Council members. They’re held to a strict code of conduct.
• Get everything in writing. Make sure you understand all terms and conditions before signing anything.
• Walk away if you feel uncomfortable. Trustworthy companies won’t pressure you to decide.

If you’re unsure about a company or its products, seek independent financial advice. A professional advisor can help you figure out what’s best for your situation.

Avoid Equity-Release Companies that Don’t Assess Your Circumstances

Good providers take the time to:

• Listen to your needs.
• Explain how equity release could affect you.
• Explore all your options before recommending a plan.
• Tailor their services to fit your unique situation.

If a company skips these steps, it’s a clear sign to look elsewhere.

Denial of the Option to Move or Transfer Your Plan

Always choose a company that allows you to move your plan to a new, suitable property if your circumstances change. 

Stay away from providers that limit your flexibility or make transferring plans difficult.

How To Protect Yourself from Scams in the Equity Release Sector

Scams can be avoided if you stay informed and cautious. Here are some steps to help you make confident decisions:

• Seek independent legal advice and work with a qualified equity release advisor.
• Compare different plans and providers to find what suits you best.
• Check the company’s regulatory status and accreditations for added protection.
• Read customer reviews to learn about others’ experiences.
• Carefully review and understand all terms before signing.
• Know your rights and responsibilities as a customer.

Reputable companies stick to strict regulations and offer clear terms, which helps protect your interests.

The Bottom Line

Knowing the risks and red flags in equity release can save you from costly mistakes.

Steer clear of companies with dodgy practices or poor reputations. Instead, go for transparent providers with strong customer satisfaction records.

A trustworthy broker can also make a big difference. They’ll offer expert advice, compare plans, and negotiate terms, ensuring the process works for you.

Ready to explore your options? Send us an enquiry, and we’ll connect you with a reliable broker who can help you find the perfect equity release plan for your goals.elease product to fit your financial goals.