Frankly, this is a transformation that’s long overdue. Because regardless of how hard you’ve worked, or how well you’ve managed your finances, the mortgage options open to you when you reach 50 become shockingly limited.
Instead of being seen as the prime, reliable customers they are, borrowers over the age of 50 are often shut out by traditional lenders. Even if they can afford a mortgage, later life lenders are often not even given the option to apply for one. Computer, as they say, says no.
That’s why I started LiveMore. To say yes to borrowers aged 50 to 90-plus. To help them carry on living the lives they love. And that’s why Consumer Duty is music to my ears.
An opportunity for improvement
Thanks to the new rules, if you’re over 50 and you need to borrow money, your life experience has never been more important, your rights have never been more protected, and the lending process has never been more transparent. And not just when you sign up, but for the life of your agreement.
I believe lenders should be embracing these changes because they also represent a huge opportunity for those who are serious about putting the interests of their customers first. In fact, the seismic shift that Consumer Duty will usher in, driven by an unerring focus on customer outcomes, is our chance to level up as an industry at a time when public confidence in its reputation is at an all-time low.
The size and scope of this opportunity is explored and analysed in detail in a 4,000-word Consumer Duty white paper published by LiveMore which is available for anyone to download. One of the white paper’s key objectives is to get past the rhetoric, the platitudes and pronouncements about Consumer Duty, and show what the rules mean in practice.
Getting into the detail
The paper explores how the new regulations will demand good outcomes for consumers in four specific areas – products and services, price and value, consumer understanding and consumer support.
Of course, the new regulatory standards will also present challenges that lenders need to overcome. The white paper analyses those, too – partly by looking in detail at vulnerability issues specific to this age group but also by showing how the “right” product can become wrong for some customers in the context of the new rules.
Take a flexible mortgage product, for example, which gives consumers the opportunity to over or underpay, drawing back overpayments if needed. The product is marketed to consumers of all ages, even though post-sales analysis shows that only older customers make overpayments. In terms of Consumer Duty, if younger consumers are paying a higher rate to have payment flexibility they never use, have they been mis-sold?
It also looks in detail at how the equity release market can thrive in the Consumer Duty era if it can overcome a raft of potential pitfalls.
The arrival of Consumer Duty regulation is wonderful news for a market that has long been underserved by financial products. At LiveMore, we’ve seen first-hand the frustration felt by older consumers who have proven payment records but are told they no longer qualify for a mortgage.
I believe Consumer Duty will consign that inequality to history. But don’t take my word for it. Download the white paper here.
