Ben Thompson, deputy chief executive of Mortgage Advice Bureau, told the audience that the outlook for the later life market was strong after a challenging year impacted by the pandemic.
He described how the driving forces for customer taking later life lending products has changed and will continue to do so in the coming years, in his session ‘Lessons from lockdown’.
Thompson highlighted the increasing number of interest-only mortgage coming up to the end of term, with this trend set to peak in around 2032.
He said: “As an advice community we need to probably adapt to recognise and spot those changes and those opportunities in particular. Whilst many people will sell a property or move or downsize or repay through their own resources, there will be a huge amount of people who won’t be able to do that and will need a later life product.”
Thompson said there’s also an opportunity to work closer with traditional mortgage advisers who have these customers on their books to provide the later life solutions that could help these borrowers.
In 2020 there were around 60,000 interest-only mortgages set to mature, owing an average of £104,000 and with equity averaging £387,000, according to Thompson’s presentation.
He said: “It’s a real opportunity for those in the market for today and clearly it’s going to get bigger still.”
Thompson also examined how shortfalls in pensions and care costs will also help drive the later life market in the coming years.
Separately, the issue of vulnerable customers was highlighted in the presentation.
Thompson said that during the pandemic, advisers have had to make sure advice is relevant to the longer term, as well as shorter term – and recognise when people may be taking products for the wrong reasons.
And in the future, the needs of vulnerable clients are going to keep growing.
Thompson said a deeper fact-finding questions to pinpoint the genuine reason for taking products, are among the changes that may be needed to meet the needs of these customers.
He added: “We have an increasing responsibility as an advice community to completely adapt to recognise and help vulnerable customers.”
In the live questions after the session, one delegate asked how advisers can better protect themselves from claims made by family members further down the line if capacity or lack of understanding is challenged.
Thompson replied: “I think that the regulator, lenders and intermediaries need to work incredibly closely to ensure they can be no future, retrospective recourse from customer/family to adviser, so long as the right processes have been duly followed… Customers need more choice, product and advice – we do not want an industry frightened of helping customers if they are unduly worried about future claims.”
You can register to watch the Later Life Lending Online Event here: https://www.mortgagesolutions.co.uk/events/later-life-lending-event/venues/register-online/
Presentations will be available to watch for 30 days after today’s event.