...but only 1 in 100 customers switch to save

FEWER than one in 100 equity release borrowers are switching deals to save thousands of pounds, figures unearthed by Money Mail show.

Earlier this year, we reported how borrowers could save more than £30,000 after ten years by moving onto a lower interest rate — even after paying any exit fees. But lenders are not obliged to let their customers know that they could save.

It means tens of thousands of older and vulnerable borrowers could be needlessly languishing on high interest rates. There are now more than 300,000 live equity release mortgages, according to trade body the Equity Release Council. Aviva has more than 100,000 of these.

But our Freedom of Information Act request to City watchdog the Financial Conduct Authority (FCA) has revealed that in 2018 just 121 remortgages to a new lender took place. This climbed to 772 in 2019 and 1,011 last year.

Current rules say lenders cannot contact their own customers to discuss switching plans, but an independent review and advice can be recommended to them. Patrick Buckingham, 82, from Warwick, was able to switch his £100,000 equity release loan from a 3.90 pc rate to 2.27 pc.

He called his broker Responsible Life in March when he read that rates had dropped. He will now save £16,800 over the next eight years and £37,000 by his 95th birthday.

Patrick says: ‘I was delighted. I’m sure some people have no idea of the savings they’re missing out on.’