The later life lender welcomed the Financial Conduct Authority’s (FCA’s) Mortgage Rule Review (MRR) Discussion Paper (DP) 25/2 suggestion that later life lending needed to be core to the mortgage market, but said regulatory reform was needed to make this possible.
The MRR proposed making the equity release advice qualification mandatory for all advisers and encouraging more innovation in this part of the market to address affordability and access challenges.
More2life said advice silos needed to be removed, as the separation of mainstream and later life mortgage advice meant consumers were only aware of their options based on the kind of advice they sought.
More2life said this was “unacceptable” and suggested combining the rules so all borrowers aged 55 and over received holistic advice by default.
The lender also said adviser qualifications should be unified, as the separation was “outdated” and “reinforced barriers”. More2life said this should be “absorbed into CeMAP”, giving all advisers a “baseline understanding of later life options” while having the ability to refer cases where possible.
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Further, it suggested that the FCA provide clear guidance to stop lifetime mortgages from being seen as a product of last resort, particularly despite recent product evolution.
The lender said the regulator should “issue explicit good and poor practice guidance for later life lending, to build confidence, reduce stigma and ensure advisers can engage with these products without fear of regulatory censure”.
More2life also said mandatory disclosure requirements should apply to lenders and advisers to make borrowers aware of their choices at the end of a mortgage term.
Lastly, it suggested rule changes encouraging hybrid and flexible later life lending products to reach the intended markets, to stop “current silos acting as a brake on development and adoption”.
Borrowers unaware of all options
More2life said product innovation in the later life market was already delivering “tangible benefits” for customers, adding that two-fifths of its lending was drawdown lifetime mortgages, which offer downsizing protection and allow a rate discount to those who make repayments over a set period.
The lender said homeowners using housing wealth to support their finances and care needs reduced pressure on public services, but despite these benefits, too many homeowners were “not being shown the full picture”.
More2life added: “Consumer awareness remains low, adviser participation needs to improve, and perceptions of regulatory risk [are] too high.”
Dave Harris, CEO of More2life, said: “The FCA’s Discussion Paper, and the specific chapter on later life lending, is a recognition of how important it has become, but recognition is only the first step. The next is action. Older borrowers need advice that reflects their full range of options, not advice determined by whether their adviser happens to hold a separate qualification.
“Our experience shows that when customers are made aware of lifetime mortgages, the outcomes are overwhelmingly positive. Drawdown and interest reward products help people manage borrowing costs and build financial resilience. Hybrid models can bridge the gap between mainstream and lifetime mortgages. Downsizing protection and voluntary repayments give people flexibility. These solutions are already here. What is missing is the regulatory framework to ensure more people can access them.”
He added: “Lifetime mortgages are not a product of last resort. They are helping customers repay debt, stay in their homes, adapt their properties, and support their children and grandchildren. Imagine the difference if every older borrower had the chance to consider these solutions as part of a normal advice journey.
“The FCA has asked the right questions. Now we need it to deliver the right answers: one advice journey, consistent qualifications, mandatory disclosure of later life options, and clear guidance that gives advisers the confidence to act. We are ready to play our part, but the framework has to evolve if later life lending is to achieve its full potential.”
