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Behaviour towards borrowing into retirement is changing, brokers say
There has been a change in the way people borrow leading up to and in retirement in the UK, brokers have said.
A poll of more than 150 brokers conducted by Hodge found two-thirds of advisers had noted a shift.
According to brokers, more people are borrowing into retirement to consolidate debts and meet daily living costs. The majority said the number of people wanted to take a mortgage into their retirement years was also rising.
The brokers said less people were still borrowing after retirement for aspirational reasons, such as to pay for a holiday or car. Instead, many are looking to supplement their pension payments or pay for living expenses.
Due to this, 70% of brokers responding to the poll said they wanted more education on how to support their clients borrowing into retirement.
Additionally, 90% said borrowers needed more information about the options available to them.
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Andrea Roberts (pictured), national account manager (North) at Hodge, said: “What’s crucial to note about this feedback is that borrowing into retirement is becoming far less about the ‘nice to haves’ and much more focused on meeting financial liabilities brought about by pension or endowment shortfalls, outstanding debts, rises in the cost of living, and more.
“Put simply, borrowing into a customer’s retirement is becoming more of a necessity for many.”
She added: “It’s really important to us, therefore, as specialists in this area of the market, that we continue talking and listening to our brokers, so that we in turn can continue supporting intermediaries and their customers in the moments that matter.
“Our focus here at Hodge has always been to flex and respond to market pressures in a way that best reflects the challenges borrowers are facing, and talking directly to the brokers that we work with is one of the many ways we continue striving to achieve this.”
Hodge has made a number of changes to its mortgages for older borrowers in recent months, including a higher loan to value (LTV) limit for over 50s and an increase to the maximum loan size available.