Old, free and single: Why housing wealth must be part of the conversation – Davidson

According to the report, the poverty rate among pensioner couples is 11%, compared with around 20% for single pensioners. Around 1.2 million single pensioners were living in relative poverty in 2023/24, of whom roughly two-thirds were women, due to them living longer on average.

We have to realise that it’s not as simple as a pensions policy issue anymore. It has become a housing and mortgage one too, and brokers reading this are often closer to it than they realise.

Preparing for changing circumstances

Many clients now reaching their 70s have lived financial lives built around two incomes, shared bills and joint retirement plans, but divorce, separation or bereavement can change that position overnight. Others may never have married but spent years cohabiting, only to enter retirement alone without the same pension-sharing protections available on divorce.

The result can often be a client with a valuable home but insufficient income to enjoy it. They may be struggling with everyday costs, maintaining a property that needs work or servicing a mortgage that was manageable as a couple but not so much on one income.

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It is for this precise demographic that our industry needs to speak more confidently about equity release. For the right client – particularly someone in their 70s or older – a lifetime mortgage can be a positive financial planning tool. It may allow them to clear an existing mortgage – the traditional number one reason for a lifetime product – improve monthly cash flow – quickly becoming the future top reason – adapt their home, or simply enjoy greater independence without having to move away from their community and support network.

Giving older borrowers the confidence to borrow

Older applicants can feel shame about tapping into their housing wealth, so it’s part of the adviser’s job to explain that doing so is not failure, but utilising an asset accumulated over decades to improve the life being lived now.

Too often, equity release is still discussed as a last resort, accompanied by so many warnings that its potential benefits almost disappear. Of course, compound interest, the effect on the estate, entitlement to means-tested benefits and future needs must be carefully considered. Good advisers, sadly, not all are good, never hide those consequences, but good advice should not begin with the assumption that preserving the maximum possible inheritance is always more important than the homeowner’s quality of life.

A client may quite reasonably decide that security, dignity and financial breathing room in their 70s and above matter more than leaving every pound of housing wealth untouched.

Pointing older homeowners in the right direction

Holistic advice remains essential. A standard mortgage, retirement interest-only (RIO) mortgage, downsizing, savings, pension income or family support may offer a better answer. Indeed, often, doing nothing for now is appropriate.

The point is to understand the client’s objectives, income, health, property, family circumstances and plans before recommending anything whatsoever.

Yet ‘holistic’ should not become a euphemism for ‘avoiding equity release at all costs’. If every realistic alternative has been considered and a lifetime mortgage best meets the client’s needs, advisers should be able to recommend it positively and with conviction.

For mainstream mortgage brokers, the first step is not becoming an expert in every later life product, but it is about recognising the conversation that needs to take place.

Perhaps an older client has reached the end of an interest-only term. Maybe a recently widowed borrower calls to ask whether the mortgage can remain in one name. How about a client who mentions that maintaining the house is becoming difficult or that rising bills are steadily eroding their savings? These are not isolated problems, but clear – or sometimes not so clear – signals that the client may need specialist, joined-up advice.

We ought not to completely ignore the commercial opportunity here either. More mature clients often have children, grandchildren and wider family relationships that the referring broker can retain. Helping at a vulnerable transition builds trust that can endure across generations, provided the referral is handled transparently.

The LCP report rightly calls for policy changes to improve the position of single pensioners in future, but many people are already retired, already living alone and already facing financial pressure. They cannot wait decades for pension reform to help them.

Our responsibility is neither to push equity release, nor to shy away from it; it is to recognise when housing wealth can turn a constrained retirement into a more secure and fulfilling one and to make sure older clients receive advice broad enough to find the right answer.