From today equity release customers have the right to make voluntary, penalty-free partial loan repayments.

It has become a prerequisite for all plans recognised by sector body the Equity Release Council.

Almost 700 firms are signed up to the Equity Release Council standards.

Equity release customers in the UK made £78m of penalty-free partial repayments last year, reducing their interest costs by almost £100m over the next 20 years, according to the Equity Release Council.

Over 125,000 penalty-free part repayments were made in 2021 at an average of £608 each time.

The option to make penalty-free partial loan repayments has become an increasingly common features in equity release products.

The Equity Release Council has now made it the fifth product standard for plans. The other four standards, in place since 1991, are the right to remain living in the home for life, a fixed or capped interest rate for life, a no negative equity guarantee, and the right to port their loan to another property.

Under the new standard firms will be allowed to continue to cap penalty-free repayments.

The Equity Release Council says most firms cap the repayments at 10% to 40% of the original loan per year.