However, steps can be taken to protect older people from being vulnerable to financial abuse and exploitation in later life.
‘120,000 cases of elderly people being financially abused in England each year often by family, friends and carers’
The charity Action on Elder Abuse estimates there are approximately 120,000 cases of elderly people being financially abused in England each year, often by family, friends and carers. Sadly this is not surprising, as the news is never short of these stories. Just last week a carer was jailed for stealing £250,000 from a vulnerable war hero, but luckily this particular case had its day in court.
‘there is a crucial role for advisers to play when helping clients plan for their future and to understand prospective problems they may run into.’
Helping a customer to prepare for a possible decline in their ability to run their finances is as important as speaking to them about their income in retirement and any possible long-term healthcare costs. There are already well-established processes in place to help customers to deal with this – for example, by arranging a power of attorney to put someone they trust in charge of their finances in case of incapacity.
These discussions are especially important in the context of equity release. As the equity release market typically attracts clients between the ages of 65 and 74, there is a crucial role for advisers to play when helping clients plan for their future and to understand prospective problems they may run into. In addition to highlighting what products are available to their clients and the benefits of these, advisers can use these discussions to share their detailed and extensive knowledge of the mortgage and lifetime mortgage market.
Advisers are well equipped for dealing with older, and sometimes vulnerable clients, as they can provide appropriate and relevant advice on a wide range of topics based on their training and qualifications. This not only includes advice on which type of loan would be most suitable for their client, but also what effect taking such a loan can have on other sources of income or the inheritance value they will eventually leave behind.
When dealing with sensitive and often life-changing products like equity release, it is important that all parties know exactly what these solutions entail.
With an ageing demographic, we will continue to see growth in the lifetime mortgage market as equity release products and their increasingly lower rates are a vital way for older homeowners to release some of their housing wealth to supplement their retirement income. Those who suffer from ill-health later in life can benefit further by purchasing an enhanced plan, which can increase the amount of money they can borrow against their homes.
Protection from financial predators
Options like these will further expand the role of advisers, especially for those who are working with customers that may be vulnerable to possible financial predators. In this scenario, it is vital that clients are fully informed on the pros and cons of the different choices available, and referred to a specialist if advisers feel they are not able to give sufficient advice.
Advising older customers, whether that be for equity release or other financial matters in later life, not only needs to be managed very carefully, but also tightly regulated to make sure that the correct safeguards are in place. As an industry, we can work together to help limit the exposure our clients have to those whose intentions are not honourable.
