Blurring the lines: How proof of income is shaping the future of later life lending – Saroya

Over the past year, the gap between the conventional mortgage market and the later life sector has narrowed considerably. We’re beginning to see the first iterations of later life plans that mirror many characteristics of traditional mortgages; most notably, mandatory payments in exchange for higher-loan-to-value (LTV) ratios. 

While these early offerings are a promising start in innovation, they’ve so far been somewhat eclipsed by interest-serviced lifetime mortgages. These plans offer borrowers a discounted interest rate while crucially preserving their right to remain in their home – a key priority for later life clients. Both options, however, have their place, and it’s clear that mandatory payment plans will continue to evolve and improve. 

The broader consensus among non-advisers in the later life market is one of excitement; the blurring of these two sectors is seen as a positive step forward.  

Clients now benefit from a wider array of choices, rather than being shoehorned into a particular product simply because it’s what their adviser specialises in. 

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Why income proof still matters

But with this innovation comes a familiar grumble: Why do we now need formal proof of income and expenditure from clients? Isn’t it enough to simply ask and trust their answers? 

In short: no, it isn’t – and here’s why. 

Whether viewed through the lens of Consumer Duty or just good practice, truly acting in a client’s best interests demands more than verbal assurances. Collecting and verifying income and expenditure details isn’t an exercise in bureaucracy – it’s a critical safeguard that ensures advisers are making truly informed, responsible recommendations. 

At worst, securing proof simply validates what the client has told you, reinforcing the advice you’re giving. At best, it reveals hidden details that can dramatically influence the advice process – uncovering potential vulnerabilities or opening up new and better solutions that might otherwise have been missed. 

In just four months of gathering proof of income and expenditure at Viva, we have encountered numerous cases where significant client details would have gone unnoticed. In turn, this has enabled us to offer a broader spectrum of options, and more importantly, to have deeper, more meaningful conversations about what clients genuinely want and need from their later life plans. 

Taking this extra step doesn’t just ‘tick a box’. It empowers advisers to ‘get it right first time’, building plans that are truly aligned with each client’s full circumstances. It also plays a critical role in identifying and supporting vulnerable clients – those who may otherwise struggle in silence, but who can now receive the tailored support and advice they deserve. 

Clients are often relieved, even grateful, when someone takes the time to really understand their situation. They aren’t just signing up for a mortgage; they are entrusting you with a crucial aspect of their future security and wellbeing. 

So, if you’re considering whether it’s worth the additional effort to request and verify proof of income and expenditure, my advice is simple: do it. Yes, it requires more time and diligence. But the payoff – in client trust, better outcomes, and peace of mind that you are truly offering the best advice – is worth every second. 

In a sector where doing right by the client must always come first, this extra step isn’t just best practice. It’s essential.