You are here: Home - Better Business - Business Skills -

Why the platinum market is the way forward – Rob McCoy

by: Robert McCoy, senior product manager, TMA
  • 12/07/2017
  • 0
Why the platinum market is the way forward – Rob McCoy
In the UK, 19 million adults are over the age of 55 and this is expected to soar to 26 million by 2039, according to the CML.

But before you think they’re all sitting at home, many are still in employment. Research by Aviva found that almost a third of adults in employment are over the age of 50, and ONS statistics show that over a million over 65s are employed.

We’ve known for years that the platinum market is where the money is at, which is why marketers specifically target baby boomers. But with over 55s now estimated to hold £6.4 trillion of wealth and 63% of the UK’s property – worth around £2.5trn – it’s time that we accept that over 55s are probably the most financially secure in the country.

Following the Mortgage Market Review, lenders tightened age restrictions. However, changes in demographics, economic pressures and policy and regulatory changes highlight the growing issues around borrowing in later life as demand from this age group has changed. In fact, recent research from the CML shows that in 2016, 88,000 mortgages were sold to over 55s.

Thanks to this shift in demand, it’s not just specialist lenders tapping into this market, traditional high street lenders are beginning to relax their later life lending criteria. According to Moneyfacts, in 2014 5% of all residential mortgage products (excluding lifetime products) were available for terms that would take borrowers over the age of 75. At the beginning of 2016 this had risen to 17% and by September 40% of products were available. Currently 21% of products on the market have a maximum age of 80 and 13% have no maximum age.

As this area of the market continues to grow, the stigmas associated with traditional lifetime mortgages must disappear as we look ahead to the new products that lenders are launching. A lot of these products have many flexible benefits such as voluntary full, or partial monthly payment options or lump sum repayments that don’t carry repayment penalties.

The later life product landscape will change and advisers must sit up and take notice. Ideally, we will see more high street lenders come to market, otherwise a huge proportion of the market will remain underserviced.

If you are authorised to sell later life lending products, make your clients aware of it. It’s all well and good saying “yes we do mortgages”, when what you really need to be saying is “yes, we do mortgages for all ages, including the over 50s”. If you aren’t authorised, make sure you build up a relationship with an adviser who is and who will pay you a referral fee. People are living and working for longer and it’s only prudent that this age group becomes a key target for us.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • Budget 2017: Hammond pledges to build Britain fit for the future - https://t.co/MwX4w1KD9a
  • My week on Twitter 🎉: 78 Mentions, 100K Mention Reach, 105 Favorited, 67 Retweets, 27 New Followers. See yours with… https://t.co/UESH1SKd98
  • Skipton to launch residential seven-year fixed, three-year BTL and new build products - https://t.co/8C7fBZ1x3x
Read previous post:
Headshot of Andrea Rozario COO of Bower Retirement
Let’s not kid ourselves – equity release rates are important – Rozario

Whether it’s a house or a hot dog, when we purchase a product there are always multiple factors at play....

Close