The market shows no sign of slowing down. Some 38,510 new later life loans were taken out in Q1 2025, up 33.5% year-on-year, according to UK Finance.
Retirement borrowing can benefit customers by repaying interest-only mortgages, assisting children financially, or releasing equity for a comfortable retirement. Indeed, with UK housing stock valued at £9trn, the Financial Conduct Authority’s (FCA’s) Mortgage Rule Review Discussion Paper notes that “some of this could support a more comfortable retirement.”
Being aware of all options
How often are customers presented with only one option – either equity release or a traditional mortgage – rather than being shown both side-by-side? And this often depends on whether they’re speaking to a mortgage adviser or an equity release adviser.
Some firms do have specialist advisers reviewing both, or they have referral arrangements to direct customers to the most suitable lending option.
We should aim to make holistic later life advice the rule, not the exception.
We urgently need to make it easier for advisers to ensure customers benefit from the right advice – whether that be for a traditional or lifetime mortgage.
Traditional mortgages focus on income and affordability to assess repayment ability, while equity release products consider age, and the value and condition of the property. Their terms and features differ, not to mention the procuration fees. Yet, both can be viable options for the same group of customers.
Making holistic advising easier
As an industry, we must continue to develop sourcing systems that present both options – in parallel – for meaningful comparison.
Affordability assessments should be conducted before determining the best option for the customer. Putting the customer at the heart of the process is essential. Rather than starting with a product and then building a case to support it, we should begin with customers’ needs and build the case from there.
The FCA is raising concerns. The Mortgage Rule Review Discussion Paper states: “Problems in the later life lending market will worsen if not addressed…risking the market’s ability to meet future borrowers’ needs.” It is considering requiring all advisers to pass equity release qualifications, in addition to standard mortgage qualifications.
The FCA reassures the industry of its support, noting its “rules may need to change to enable more holistic advice.”
Putting the customer first
By moving away from product-led advice to focus on customer outcomes, we can serve a customer’s long-term interests. Get it right for a customer when they’re in their sixties, and they’ll call on you again – if their needs have changed – later in life.
Being customer-focused starts with robust fact-finding and recommendations based on the customer’s ability and willingness to service any borrowing. Customers should be presented with the benefits of both options: the lower interest rates typically available with a traditional mortgage, versus the ability to roll up interest offered by equity release. After all, how can equity release be proposed as the best option if affordability hasn’t been properly tested?
Conversations are happening across the market, but we must make a real change for customers and not just talk about it.
We need to stop discussing change and start delivering it. Doing nothing risks poorer outcomes for our customers, for whom we all have a duty. With shared commitment, better tools, and a customer-first focus, we can build a smarter, fairer, later life market.
Kicking the can down the road is no longer an option.
Charlotte Grimshaw, head of intermediary relations at Suffolk Building Society
