The stiff upper lip of the older generation is something we should all be proud of. However, this pride and resilience can sometimes have a detrimental impact on their finances. To help our pensioners remain the proud generation they deserve to be, we should help them understand that disclosing things like medical conditions is nothing to be worried about and can in fact lead to more financial flexibility in later life.
The UK is certainly a hub of the developed world, but the health of our citizens is far from perfect. One in five adults are considered overweight; three million people have been diagnosed with diabetes and 1.3 million men and women in the UK have had a heart attack at some point in their lives. However, these details are often hidden by potential customers, as a recent study conducted by equity release specialist More2life shows, more than one in four (27%) equity release advisers claim they have had clients who have covered up some form of medical issue.
Advisers may feel awkward and customers may feel too much pride, but the only way to combat this issue is to thoroughly explain the benefits of enhanced plans. More2life also claim that upwards of 75% of over 65s could qualify for an enhanced plan and yet only one in every six equity release plans are sold on enhanced terms. Many thousands of customers, therefore, are losing out on releasing more equity. Loan-to-values (LTV) can jump up by 9% or more if customers disclose medical information like a diabetes diagnosis, high blood pressure or angina. This LTV jump converts into thousands more being available for release, and this is what we must make clear to clients, because right now we are failing.
Advisers must be told again that it is imperative to ask their clients the right questions, and medical and lifestyle questions are important to get out of the way first. As many as 22% of advisers admitted omitting leaving out these questions in the first meeting. Admittedly, I can understand that these questions may make the adviser and the client feel uncomfortable, but when we are talking about a decision that is as important emotionally as it is financially, we should all be able to bite the bullet and ask the difficult questions.
