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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think its fine for people who took out an equity release to be held to the contract they signed

58 replies

Lemith · 30/09/2015 08:03

Daily mail sad face story. www.dailymail.co.uk/money/mortgageshome/article-3254070/Thinking-taking-equity-release-Meet-retired-couple-pay-Aviva-135-000-spend-years-together.html

Yes having a health condition is upsetting. But they should of read what they are signing and thought about the future. I have a family member in a similar situation and they keep moaning about being done over by the bank, however it is them that through their own free will signed up to the scheme!

OP posts:
OP posts:
cleaty · 30/09/2015 08:05

Depends if it is a fair contract, some of the equity release schemes are not. A contract can be legally judged by courts to be unfair, even if someone has signed it.

SoupDragon · 30/09/2015 08:07

They bought a boat with the money from the equity release!

TeenAndTween · 30/09/2015 08:08

I think people can be quite short sighted about money. Spend it today, worry about the implications tomorrow.

Hence all the people in the 80s & 90s who took out endowment mortgages rather than repayment. Or interest only with no idea how they are going to pay it back.

I suspect the new rules allowing people to withdraw large lump sums from their pensions will come back to bite people too.

cleaty · 30/09/2015 08:08

It doesn't matter what they bought. It was whether the contract was fair or not.

ginmakesitallok · 30/09/2015 08:10

I dont see the problem either. They borrowed money, bought a boat ffs and are surprised that they have to pay it back??

Original poster
Lemith · 30/09/2015 08:11

It does matter what they bought, as shows their character.

To think its fine for people who took out an equity release to be held to the contract they signed
OP posts:
LineyReborn · 30/09/2015 08:12

Some contacts are unfair and then on top of that people are given the 'hard sell'. It's up to the courts to decide.

SoupDragon · 30/09/2015 08:13

It does matter what they bought. I would feel far more sympathy for them if they had taken out the equity release because they needed to. I have a few relatives who have had to take them out because of financial necessity.

cleaty · 30/09/2015 08:13

Shows their character? You are being incredibly judgy OP. This is a legal issue, and none of us here can judge if the contract is fair or not.

ThreeRuddyTubs · 30/09/2015 08:15

Poor sheila the nurse...her financial decisions means there is a rift in her family cos her son isn't getting any dosh. It says at the bottom the FOS have found in avivas favour on that one

Original poster
Lemith · 30/09/2015 08:16

Sell your story to the DM and its fair to be judgy! They made an extravagant purchase and now want to get out of paying the interest back on the loan they signed up for!

As the article says, its been decided that it was all legal.

OP posts:
SoupDragon · 30/09/2015 08:19

It is impossible for any of us to say whether the contract was unfair or the sLe of the product immoral as none of us have the policy document or a transcript of the sales talk in front of us.

Kampeki · 30/09/2015 08:29

I suspect the new rules allowing people to withdraw large lump sums from their pensions will come back to bite people too.

YY, I'm sure that we will see many more sad faces in the DM regarding pensions in the future. Disaster waiting to happen in my opinion. :(

I think the real problem is a lack of financial literacy. More should be done to ensure that people truly understand the implications of their decisions, and to make them properly consider the longer term.

mollie123 · 30/09/2015 08:36

have to agree with most of the posters on here
if you borrow money - you pay it back (or you don't borrow it and do without/save up)
if that makes me judgy - so be it Smile
read the contract before you sign it - do not trust anyone who comes to your house and tries to sell you something - if it seems too good to be true it probably is - be prepared to lose money if you take a chance/risk
if you make a mistake through your own gullibility/lack of knowledge don't put on a DM sad face - accept the consequences and take responsibility.
the only exceptions are those who are ill, elderly or otherwise vulnerable.

InimitableJeeves · 30/09/2015 08:56

It is impossible for any of us to say whether the contract was unfair or the sLe of the product immoral as none of us have the policy document or a transcript of the sales talk in front of us.

I think we can reasonably rely on the findings of the Ombudsman, who will have had the contract and the couple's account of their discussions with the company representative in front of him.

SoupDragon · 30/09/2015 08:59

I think we can reasonably rely on the findings of the Ombudsman,

Has this couple's case gone to the ombudsman? I thought that was the case of Shiela the nurse.

SoupDragon · 30/09/2015 09:01

The couple's case wasn't reviewed by the ombudsman as it fell outside their jurisdiction.

Ilikedmyoldusernamebetter · 30/09/2015 09:03

"They had lived in the same maisonette for more than a decade, and had seen its value soar from £75,000 when they bought it 11 years earlier to £120,000.

In 2003, they saw a financial adviser and borrowed £42,900 as an equity-release loan, at 7.1 per cent, from insurer Aviva."

Its a case of wanting to have your cake and eat it - benefit from the rising housing market and make 45 thousand pounds in equity through pure luck and just accept that is your right as a member of the home owning class... but make a choice to take out a loan for that amount against your house value and spend it on something you want rather than need, which won't go up in value, and think you are hard done by and "something should be done" because you have to pay the interest you agreed to pay.

Original poster
Lemith · 30/09/2015 09:39

There is a page on rainwater harvesting systems on the water company website.

www2.wessexwater.co.uk/saving-water/homeandgarden/default.aspx?id=9056&linkidentifier=id&itemid=9056

However its a bit grey, that looks like for a whole system where you drink it. This is just for one toilet.

OP posts:
SorryCantBeArsed · 30/09/2015 09:46

I've no idea if the contract was legal or not but let's face it, we all know that if you borrow money from a bank etc you have to pay it back. Compound interest is how these equity release companies make money. As for being able to draw money from pensions, I think it will for many people be used in the same way. You can draw down a sum of money to buy a boat, go on a world cruise or give it to help your kids with a house. You'll still have your house to sell at a later date if you need to.

SorryCantBeArsed · 30/09/2015 09:47

Oh bugger! Wrong thread Blush

SoupDragon · 30/09/2015 09:49

No, you aren't on the wrong thread , Lemith is :)

AuntieStella · 30/09/2015 10:02

If I read it properly, it's not about paying the amount of equity they released (plus interest) that's the problem, it's the early exit fees.

They have to be paid, if you cease to be a homeowner, unless that is by death or by occupants (plural, all of them) needing to go into a care home. This couple have moved house since 2003, when they first took it out, taking it with them. Now, they are moving to a care home together, because one of them needs care. The company has ruled that as it is not both of them requiring care, the early exit fees apply.

I've no idea if this is a common clause, nor if it is clearly laid out in the T&Cs, nor if it was properly explained in the script to be used at the time of sale.

LurkingHusband · 30/09/2015 10:08

There are an awful lot of stupid, greedy people in the world.

That's it really.