The vast array of products available to older borrowers demonstrates how the industry is responding to customer needs.
Customers now have greater choice in how they use their housing wealth as part of their retirement income.
However, older households remain an under-served segment of the mortgage market.
You don’t have to look far to see that there are challenges to providing customers with a holistic understanding of the market.
Older borrowers are likely to be facing complex financial decisions, not least of which because of pension freedoms and therefore need to consider their later life finances in the round. The advice structure is siloed, partly driven by the regulatory framework.
And the current qualification and competency framework does not sufficiently equip advisers with the know-how to talk across financial needs in later life.
Lenders are stepping up to help shift the industry.
As chair of the UK Finance Later Life Lending Committee, that brings together over 50 lenders, I am optimistic about the positive direction the industry is heading.
Rather than taking a product specific lens, the committee is looking at ways to build the pieces of the jigsaw that supports a well-functioning market designed to help customers get the best outcome for their needs.
Helping advisers know what they don’t know
UK Finance has worked with the London Institute of Banking & Finance to develop a CPD programme aimed at all types of advisers.
The CPD programme will equip advisers with a broad overview of the topics they may need knowledge of when dealing with older borrowers.
More 2 Life is a proud supporter of this programme, along with my colleagues on the Later Life Lending Committee.
Topics include an overview of the market, wills and Powers of Attorney, state benefits, inheritance tax, pensions, income tax, and fair treatment of vulnerable customers.
Advisers will receive a ‘later life lending’ CPD badge upon completion of the programme.
Achieving consistent outcomes for older customers
The industry is also working together to ensure that consistent outcomes are achieved for all customers in later life.
UK Finance is developing standards for its members to ensure that older customers receive appropriate and holistic advice to meet their needs.
This means providing customers with clear and easily accessible information, signposting customers to further advice if needed, and discussion of the customer’s broader later life finances.
I’m confident that the efforts of the industry to lead the way on later life lending will help to create positive changes for customers overall.