The FCA report into how financial services supported older customers highlighted there was as advice and product gap for older borrowers in the market, with concerns over “opaque and complex” later-life lending criteria.
It’s suggestions of looking at product and service design, customer support, as well as reviewing and adapting strategies were largely welcomed by the later lending community.
Dean Mirfin, chief product officer at Key Retirement, agrees with the FCA’s review: “We see the paper from the FCA as a fair reflection, from our experience, of some of the many challenges being faced by older borrowers.
“While many lenders have changed their approach to older borrowers, these initial findings show there is still a long way to go.” Mirfin also contends that there is no panacea to resolve these issues, but that lenders “clearly can do more”.
The Ageing Population and Financial Services paper outlines how the ageing population would impact the financial services industry. The project, which was launched in February 2016, looks at the implications of having an ageing population and the resulting impact on the industry, as well as guidelines.
The findings include risks that older peoples’ financial services needs are not being fully met, which can result in exclusion, poor customer outcomes and potential harm.
BSA targets lenders
The Building Societies Association (BSA) said the paper highlights the stark demographic changes the UK faces as a country and some of the product gaps that currently exist, particularly in later-life lending.
According to Paul Broadhead, head of mortgage policy at the BSA, building societies have been at the forefront of driving change in the provision of financial products for the needs of older consumers and he challenged other lenders to step up their work.
“Over the past couple of years, the number of societies offering mortgages that will extend into a borrower’s eighties and beyond has almost doubled,” he said.
Broadhead continued: “But this market will continue to grow dramatically and as we have repeatedly argued, other lenders will need to follow suit. The FCA cites research in its report that the share of borrowers aged 65+ is set to go from 1 in 6 currently to 1 in 4 by 2050. A third of babies born today can expect to celebrate their 100th birthday.”
New campaign
Stuart Wilson, channel marketing director at More 2 Life views the report’s findings as a wake up call: “Equity release has seen record levels of growth recently, however, as these findings show there is still more to be done to ensure older homeowners are receiving the right advice and are gaining access to the products they need to fulfill their borrowing needs.”
“At More 2 life we fully support the sentiments of the FCA and we are committed to working with advisers to ensure they provide the best possible advice for their clients. As such, we will be launching a new campaign for equity release advisers, which will aim to put specialist independent advice at the heart of getting better outcomes for consumers,” said Wilson.
This paper is the first of a series of documents which the FCA will publish as part of its focus on consumers.
