The Financial Ombudsman Service (FOS) has ordered an equity release provider to repay a client the cost of a lifetime mortgage after it found the client had received bad advice.
The FOS decided the firm was wrong to advise its client to take out a lifetime mortgage and should have instead told him to use a tax free lump sum from his pension to fund an investment. Mr and Mrs C were in their early sixties when they decided to approach an equity release lender to help them raise a pot of money to buy a motorhome. The firm's in-house adviser recommended the semi-retired pair take out a lifetime mortgage to the tune of £25,000. When Mr C retired a couple of years later he decided to pay off the lifetime mortgage using a tax-free lump sum from his pension, only ...
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