The report noted it was increasingly necessary to consider later life lending in the wider context of customers financing their retirement and later life, not just buying a home.
It highlighted that a growing number of older home owners were arriving at retirement not having paid off their mortgage, not having enough income or without adequate savings – and perhaps all three.
“For some, financial difficulties are compounded by health issues that prevent them working in later life or require them to modify their homes,” it added.
Information gap
The research found that too often the industry operated in distinct silos – one for residential mortgages and another for equity release.
Many industry players recognised that they did not currently provide later life borrowers with the tools they needed to compare their options for borrowing against their property.
Report author Jackie Wells, independent policy and strategy consultant at Jackie Wells and Associates, said tacking this information gap was the most important point to address.
“The research for our project suggests that, first and foremost, consumers need more help in navigating the market for borrowing in later life,” she said.
“People need help in finding an intermediary or lender who can help them evaluate the options available to them and the risks to which those choices may expose them.”
Co-ordinated approach
The possibility for making generic guidance or information available across the lending sector was one idea floated to help inform borrowers.
“Ultimately, later life borrowers would be best served by being able to access information, guidance and advice on the full range of products, on the high street or online, but there are a number of other steps that government and industry can take,” Wells said.
“The new single financial guidance body being developed by the government should have a key part to play comparing options and signposting consumers to information and help.”
Wells also highlighted that lenders would need to address the increasing need for later life borrowers to access products which transition between traditional and lifetime mortgages.
“Traditional mortgages may also need to adjust to the new realities of retirement finances and changing working lives,” she continued.
“More than anything, the different attitudes to borrowing in later life that exist among consumers and industry need to converge.
“Recognising that borrowing in later life is about supporting retirement finances rather than acquiring a home will do much to bring about that alignment,” she added.
