Mortgage Rule Review shows advisers can’t afford to ignore later life lending – Harris

It sets out in broad terms what the regulator’s priorities will be for next year, and where it expects to be making rule changes.

The fact that the FCA has specifically identified later life lending is really encouraging. The FCA is acknowledging that property wealth is playing a much bigger role in how people fund later life, becoming a central part of planning rather than a last resort option. That matters because it reflects what advisers are already seeing: customers no longer view their home as something to be left untouched until the very end. Increasingly, it’s part of active, considered financial planning.

Later life lending, and lifetime mortgages in particular, sit at the centre of that shift, which is why they can no longer be treated as a niche or optional extra for advisers.

Customers don’t fit into neat boxes

One of the realities of modern advice is that customers don’t move from ‘mainstream’ to ‘later life’ in a clean, predictable way. There’s a growing overlap, and it’s happening far earlier than some expect.

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Advisers are seeing clients in their late 50s and early 60s who are still working, but starting to think seriously about retirement. Some want to manage interest-only debt, while others want flexibility, to help family members, or simply to reduce financial pressure as their income changes. These customers often straddle multiple categories at once.

That’s why advice that only looks at a narrow slice of the market increasingly falls short. The FCA’s focus on later life lending must serve as a prompt for advisers to take a broader view, to push them to ensure they understand where products like retirement interest-only (RIO) and lifetime mortgages fit, and when they should form part of the conversation.

Expecting more from advisers

It’s important to recognise the regulator’s attention isn’t just on product design or access, but on advice quality too. Later life decisions are complex, often emotionally charged, and carry long-term consequences, so they shouldn’t be made without proper support.

That the FCA wants to explore “ways to improve advice to help people confidently plan for later life” shows there is room for improvement. The regulator expects better than what it’s seeing at the moment.

Not every adviser will want to advise directly on lifetime mortgages, and that’s perfectly reasonable. But the days of ignoring them altogether are over. Advisers need to be confident in knowing when to write a case themselves, when to refer it on – with evidence of their referral route – and how to ensure clients aren’t left without guidance simply because their needs sit outside a traditional comfort zone.

Technology has a part to play

The FCA also talks about the role of technology, including artificial intelligence (AI), in supporting better advice. Used well, this can be hugely positive. It can help advisers assess options more quickly, spot suitability issues earlier, and deliver a smoother client experience.

But let’s be clear, technology will not replace professional judgement. Accountability, trust and decision-making still sit with the adviser. That’s particularly true in later life lending, where the wrong decision can have serious consequences down the line.

Technology must support better outcomes, not shortcut the advice process.

Waiting is not a strategy

It might be tempting for advisers to look at the FCA’s roadmap and assume there’s plenty of time. But the direction is already clear, and there is no value in delaying action.

Later life lending is becoming more central to the mortgage market, not less. Expectations around advice standards are rising, and that creates an opportunity right now for advisers and networks to get ahead by reviewing processes, building relationships with specialist partners, and investing in knowledge and confidence.

Those who move early will be better-placed to support clients properly and grow sustainably. Those who wait risk playing catch-up once expectations have already shifted.

The FCA has sent a clear signal around the role of property wealth as a mainstream part of later life planning, and advisers are expected to play a role in helping customers navigate that reality. This must serve as a wake-up call for advisers to engage with later life lending.