The Intermediary – August 2025 - Flipbook - Page 60
L AT E R L I F E L E N D I N G
Opinion
Lending into
retirement needs
a rethink
A
ccording to the Office
of National Statistics
(ONS), in 1972, over65s made up around
13% of the population,
approximately 7.5
million people. By 2022, this had risen
to 19%, or 12.7 million. Projections
suggest that by 2072, the over-65
population could reach 22.1 million.
That surely is music to the ears of
any mortgage broker whose business is
largely focused on later life lending, or
who intends to pivot in that direction
in the future.
Rewriting the rules
The adage ‘age isn’t a number, it’s an
aitude’ rings true in the mortgage
market. While some will undoubtedly
be borrowing for longer than they’d
planned, today’s older generations are
rewriting the rules of ageing.
For many, access to a mortgage
means making dreams a reality:
a second home, remodelling their
existing property, or the holiday of
a lifetime. Of course, there are those
who will borrow to plan ahead with a
move nearer to family, a ‘retirement’
relocation, or to support children with
their financial needs.
Recent stats from UK Finance
corroborate this, with an upward
trend in the number of later life loans
taken out in Q1 this year.
With this opportunity comes
responsibility. As an industry, there
are issues around later life lending we
should all be thinking about. Is the
later life borrower receiving holistic,
joined-up advice? Or is this the
exception, not the rule?
Can we all – lenders, brokers,
distributors and providers – say, hand
on heart, that we’re doing enough?
Lenders and brokers will always
look to find the best possible products
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The Intermediary | August 2025
for their older customers, but by
virtue of their business proposition,
products, and experience, they oen
end up in one of two camps – either
advising on traditional mortgages or
equity release.
Is there more we could all be doing
to ensure customers are presented
with both options?
Specialist advisers are leading the
way in holistic and considered advice
for customers, by either presenting
both options or by having formal
referral arrangements in place.
Good customer outcomes
The onus oen lies with the
customer approaching the right type
of professional in the first place.
Depending on who they choose, this
determines whether the options
considered are holistic or not.
We, as brokers and lenders, are the
experts, but we need to think about
how we can help customers access
advice regardless of their entrypoint to
the market.
For many older borrowers,
traditional mortgages and equity
release are both valid options – and
even if they’re not, both need to be
considered to come to that conclusion
– but how many consider both options
is difficult to say.
It may be that beer transparency
and education are the answer – that we
are all clearer with customers on what
we can and can’t offer.
Apples and oranges
Traditional mortgages focus on
income and affordability to assess
repayment ability, while equity
release products put more weight on
the customer’s age and the value and
condition of the property.
Therefore, even when a customer
explores both options, it can be like
CHARLOTTE GRIMSHAW
is head of intermediaries at
Suffolk Building Society
For many, access to a
mortgage means making
dreams a reality: a second
home, remodelling their
existing property, or the
holiday of a lifetime”
comparing apples and oranges. At
the risk of oversimplifying a complex
issue, should borrowers instead be
presented with the benefits of both:
the typically lower interest rates
of traditional borrowing on one
hand, and the flexibility of rolling
up interest – or paying it without
commitment – on the other?
The regulator has indeed raised
similar concerns about the later
life lending market, and these are
questions we are asking ourselves as a
lender in this sector.
Good business sense
Supporting those who are pre- and
post-retirement makes good business
sense in other ways, too. With
innovations in product design and
by working with the right lender,
customers are still offered a mortgage
at 75, 85, and beyond.
Making changes to later life lending
will help to meet the needs of an
ageing, active population. To help
achieve this, we can all work together
to create a joined-up market that
delivers beer outcomes for all. ●
