Later Life Lending Is a Growth Market for Advisers

By Dave Harris, CEO of More2Life

Later life lending is one of the fastest growing segments of the UK mortgage market. For advisers, whether you are already a specialist in this space, a mainstream broker, or a wealth manager, there is now a clear opportunity to connect your business to a market that is expanding rapidly and innovating at pace.

The demographic shift is well known. We are living longer, with more people in retirement than ever before and fewer younger people in the workforce. At the same time, property remains the single biggest asset for most homeowners. For many, it is worth more than their pension savings. Yet it is increasingly common for people to carry mortgage debt into later life, rather than having paid it off in their 40s. This means the demand for borrowing solutions in retirement will only continue to grow.

At more2life, we manage a £10 billion book of lifetime mortgages and provide the broadest range of products in the market. That means everything from lower LTV products with lower rates through to higher LTV solutions that carry a higher cost of borrowing. Alongside this, we have invested heavily in improving the efficiency of the end-to-end process, because for both advisers and customers, service is as important as choice.

What has changed most in recent years is the breadth of solutions available. Lifetime mortgages remain at the heart of later life lending, but advisers also need to be aware of retirement interest-only mortgages and other innovative products that have entered the market. Some lifetime mortgages now come without early repayment charges, others allow interest to be serviced in full or in part, and there are flexible repayment features that give customers more control. When you put that together, the picture is one of a vibrant and innovative market that offers genuine choice.

The Financial Conduct Authority’s recent discussion paper is an important signal of where the market might go next. The fact that later life lending has been given a distinct focus underlines its importance. While it is too early to say what the regulator will decide in areas such as qualifications, I believe we are at a breakthrough moment. The opportunity is here today for advisers to consider how they want to engage with this market.

Consumer duty provides a further driver. Advisers cannot afford to overlook later life lending, because their clients will increasingly expect them to at least consider it as an option. Many advisers who built their businesses advising first-time buyers in the 1980s and 1990s now find their client base ageing alongside them. Those clients will want to understand what options exist to manage debt, release equity, or plan for later life. It is no longer good enough to say this is not an area you cover. Either advisers need to equip themselves to operate in this space or they need to build strong referral relationships with those who do.

Exciting times lie ahead for later life lending. What advisers must do now is recognise the scale of the opportunity and make sure your clients have access to the products and advice that can make a real difference to their futures.