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.
