Much like our keynote speaker, former Formula 1 World Champion Damon Hill, explained, success in racing depends on precision, strategy, teamwork and clear communication. Similarly, mortgage advisers now need to adopt these same qualities to meet the evolving needs of customers entering their later years. 

In the past two decades, the UK mortgage market – and specifically the later life lending element – has seen a remarkable transformation.  

According to recent statistics from UK Finance earlier this year, a staggering 60% of all mainstream mortgages now extend beyond the retirement age, and we now know from the Financial Conduct Authority (FCA) that the average age of a first-time buyer’s mortgage maturing has moved from 56 up to 65. This stands in stark contrast to just 20% two decades ago. This shift underscores a fundamental change in demographics and the financial planning strategies required for these homeowners. 

For mortgage advisers, this trend – and we must also mention Consumer Duty when understanding what is driving our market – necessitates a shift towards a more holistic approach in their service offerings.  

It’s no longer sufficient to focus solely on those who are very close, or already in, retirement, neither is it acceptable to only look in one product or solution direction, merely touching on other potential options.  

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Advisers must now equip themselves to address the unique challenges and aspirations of clients moving into later life well before they do so, and also well past that point. This includes understanding the financial products available to this demographic, such as retirement interest-only mortgages, hybrid products combining interest payments with a potential equity release option later on, and traditional lifetime mortgages. 

Furthermore, the age range of customers who will be able to access a ‘later life lending product option’ has significantly broadened. Products tailored for those aged 50 and above are growing, reflecting a ‘new’ demand from younger retirees and those seeking financial flexibility earlier in their later life stages.  

Specialist lifetime mortgage advisers, once seemingly confined to a niche market with limited scope for expansion, now find themselves able to navigate and offer a diverse array of products, if they wish, spanning both mainstream and later life lending categories. 

 

A merging of mortgage products

One area which was discussed broadly at the conference, focused on the distinction between mainstream and later life lending continuing to blur, and what questions this might raise regarding the regulatory framework governing advice.  

The FCA has historically treated these sectors separately in terms of authorisation, professional qualifications and regulatory standards, but at the conference some of the discussions were around how it might need to now reconsider its approach to ensure advisers are adequately equipped to serve clients across the entire later life spectrum. 

The later life lending market in the UK is currently valued at approximately £28bn annually and is poised for further growth. This presents significant opportunities for mortgage advisers and their firms to expand their service offerings and cater to a demographic with evolving financial needs. Much like a skilled driver anticipates curves and straights, chicanes and tight corners, advisers must now navigate the complexities of this market with foresight and adaptability. 

To thrive in this changing landscape, we are encouraging advisers to embrace continuous learning, technological development, sourcing shifts, provider support and resource, while utilising the systems that can make the provision of advice, a recommendation and a positive customer outcome that much easier to deliver. That’s certainly the name of the game for Air, and our various propositions are designed to deliver all of this and then some.  

That means understanding the nuances of the growing number of innovative product options alongside traditional equity release and mainstream mortgage products in order to empower advisers to have comprehensive conversations and deliver comprehensive solutions tailored to individual client needs. Just as every race requires a finely tuned strategy, each client’s financial journey into later life demands a personalised approach that balances security, flexibility, and financial wellbeing. 

The mainstream and later life lending sectors of course remain separate, but there’s certainly a merging into each other, and as a result, advisers should be considering options that are available from both sectors for their clients.   

 

Equipped mortgage advisers

As advisers gear up to meet the challenges and opportunities presented by this evolution, the emphasis on holistic, client-centric advice becomes paramount. By embracing this shift and expanding their knowledge base, advisers can not only enhance their value proposition but also steer clients towards financial solutions that empower them to enjoy their later years with confidence and security. 

In the race towards a more integrated approach, advisers who leverage their expertise across the spectrum of later life lending products will undoubtedly emerge as leaders in this dynamic and growing market. Just as Silverstone and F1 and drivers like Damon Hill, and the new generation embody speed, strategy, and precision, advisers and their firms have the chance to excel by embracing the multifaceted opportunities of this new mainstream/later life lending landscape. 

As the chequered flag waves for the next lap in the evolution of UK mortgage advising, those who embrace change and innovation will undoubtedly position themselves for success.