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Advisers need to be prepared for later-life borrowing needs

by: Steve Cox, business development director at Hodge Lifetime
  • 15/08/2017
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Advisers need to be prepared for later-life borrowing needs
It is hardly surprising demand for later-life lending is continuing to grow.

The UK population is living longer than ever before, with the Office of National Statistics census predicting the number of 65 to 84-year-olds set to increase by 39% over the next 15 years.

To meet this demand, these customers need products designed for their changing requirements with more choice, more flexibility and a greater array of features.

Add into the mix the well-publicised interest-only maturity issue which will create further advice demand over the next 15 years or so and it appears certain the later-life lending market is set to boom.


Increasingly challenged

But this may present unusual situations for brokers.

Advisers may be increasingly challenged by enquiries that they have been unfamiliar dealing with.

A stereotypical individual approaching (or in) retirement no longer exists and over-55 customers are increasingly looking for lending solutions well into their retirement.

Many customers’ pension provisions alone will no longer provide the desired lifestyle in old age, and with state pension age being pushed back more people are seeking alternatives to support the standard of living they want.

More customers than ever before are considering unlocking equity from their home, and thus the lifetime mortgage market is seeing unprecedented growth.

But it isn’t the equity release of old that customers want, lenders are having to constantly innovate, adapt and change products to meet customer needs more than ever before.


Broker preparation

Increasingly, customers will seek advice from the intermediary sector as their present high street lender cannot help.

This will provide huge opportunity for many years to come and advisers should prepare for this surge in customer demand for advice.

With increasing numbers of mainstream residential products for over-55’s that do not require a lifetime mortgage qualification, adviser knowledge about how lenders underwrite older borrowers with potentially multiple strands of complex income is key.

Exams such as the certificate in regulated equity release (CeRER) and the CII’s certificate in equity release are available to advise in this area.

These qualifications can help provide a wider range of solutions for customers as they journey through products in later-life.


Essential development

Some advisers will choose to specialise in other sectors and so many firms are starting to seek and partner with specialists to meet customers’ needs via referral agreements.

Many of these specialist firms encourage the introducing adviser to remain the main point of contact for the customer.

Whichever route an adviser or firm chooses, addressing the growth in later-life borrowing requirements is essential.

Not getting involved in this sector is no longer a sensible option for firms.

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