The average age of the UK population is increasing, and many people are now living and working longer than ever before.
Retirement years can last for decades, working past the age of 60 is increasingly common and advances in medicine means there is now a greater chance of making a full recovery from illness and injury.
According to the Centre for Better Ageing, the number of people aged 50 and over in England alone has increased by 47% to over 6.8 million in the last 40 years, while the number of people aged 65 and over has risen 52% to reach three-and-a-half million. This equates to 21 million people and represents a total of 31% of the population.
At the same time, the later life lending market has also evolved from the traditional mainstay of lifetime mortgage-based equity release, to include products such as standard residential mortgages for later life, retirement interest-only (RIO) products and new hybrid/payment of interest mortgages.
Bringing the advice process together
While understanding of later life lending products and its benefits is certainly improving, the sector is still sometimes perceived as a siloed and specialist area that sits outside the traditional remit of mortgage advice.
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However, this is no longer the case and any adviser dealing with clients who fall into the 50-and-over age bracket should ensure they consider the growing range of later life lending products alongside other options if they are to meet their Consumer Duty requirements and achieve the best outcome for their customers.
Understandably, the later life lending market will be unknown territory to many advisers who have spent much of their careers advising on standard residential mortgages, buy to let (BTL) and the like.
It may also seem both complicated and complex to those unfamiliar with working in this space, which is why being part of a network can help ease the transition into the sector as the expertise, services, infrastructure and support available to members is already there.
The Right Mortgage and Protection Network (TRM) has strong and longstanding relationships with many equity release and later life mortgage lenders, via our Later Life Lending Network proposition. This enables our members to gain access to a whole-of-market panel of providers and products and ensure they continue to offer support to their clients at every stage of their lifecycle.
Advisers need support with later life lending advice
While it may be tempting for some advisers to want to leave the sector alone and remain firmly outside the later life lending space, recent data from the Bank of England shows over one million borrowers took out a mortgage that ran past the state pension age over the last three years.
This accounts for 31% of all mortgages in 2021 and 38% of all mortgages in 2022 and shows the boundaries between later life lending and standard mortgages are not just becoming increasingly blurred but almost indistinguishable.
It also shows the future of advice is already heading in this direction and it is important that advisers begin to offer all these options now, rather than waiting for what they deem to be “the right time”.
To help those advisers starting their journey into the sector, TRM is launching the Later Life Lending Accredited Adviser programme, promoting advisers who offer all later life lending products to the over-50s.
With the population of the UK getting older and people living longer than ever before, the need and demand for later life lending products is only going to increase even more.
Advisers willing to embrace these developments by offering later life lending products to any client over the age of 50 will find themselves best positioned to meet the demand of the regulator while also securing the best outcomes for their firm and their clients.
