The Intermediary – July 2025 - Flipbook - Page 10
home and help to split the assets,” with funds
understanding” – including regular consumer
sometimes used “to fund lifestyle changes or
testing of literature through to mandatory
maintain their standard of living post-divorce.”
vulnerability and Dementia Friends training
These life events, particularly when emotionally
Consumer Duty has undoubtedly “helped keep
vulnerable positions, prompting advisers to
that focus front and centre of industry thinking.”
ensure extra care and due diligence throughout
the advice process.
Regulation and responsibility
Product flexibility
The sector has moved decisively away from the
rigid, one-size-fits-all roll-up models of the
The importance of tailored, responsible advice
past toward a much more adaptable product
has only grown more critical. While Boyd
landscape. Batty notes: “The later life lending
notes that “older borrowers are not necessarily
sector has been a highly innovative space in
vulnerable,” they are statistically more likely to be
recent years,” with advisers now able to choose
in vulnerable circumstances, highlighting that
from more than 1,200 products and plans – up
“advisers who operate in this sector are acutely
aware of not only the challenges, but also of the
practical support needed.”
The Financial Conduct Authority’s (FCA’s)
Consumer Duty regulation has helped formalise
from just 300 in 2019, according to Q1 2025 data
from the Equity Release Council.
This rapid diversification reflects a clear shift
toward modular, flexible mortgage solutions that
can accommodate increasingly diverse borrower
what many advisers in the sector were already
needs. Batty highlights L&G’s Optional Payment
doing: prioritising good outcomes through
Lifetime Mortgage (OPLM), which allows
fairness, transparency, and empathy.
customers to pay some, or all, of their interest,
In light of this, firms across the industry are
adopting increasingly sophisticated strategies
to identify and respond to risk. According to
but also to stop payments if needed.
New products are also helping address
affordability challenges and complex life
Boyd, the Equity Release Council’s recent 2025
situations. Boyd points to the arrival of
update to its standards – including a new product
mandatory payment lifetime mortgages, which
standard for customers in long-term care and
allow borrowers to access higher loan-to-values
a revised Customer Charter – reinforces an
(LTVs) in exchange for committing to monthly
industry-wide model where “tailored, transparent,
repayments that later convert to a standard
trusted and thorough support” is not optional,
roll-up. Other innovations, such as discounted
but foundational.
interest rates for making ongoing payments – as
Gregory further highlights the role of bespoke
processes throughout the later life sector,
noting that Equity Release Group’s “advice
seen from more2life – give borrowers additional
levers to manage their borrowing proactively.
Boyd highlights progress in underwriting
model is aimed at the right target market, and
practices, with lenders like Suffolk Building
constantly monitored to ensure it is tailored,
Society removing maximum age limits and
empathetic and bespoke to each customer.” In
using manual assessments to better reflect older
support of this, he points to internal analysis
borrowers’ varied financial realities.
that shows that “half of [their] customers may
Crucially, this innovation is not just about
potentially be vulnerable,” and that integrated
greater choice, but it is also about smarter,
tools, from digital questionnaires to adviser
more personalised solutions. Gregory notes
prompts, help flag risks early in the process –
that “voluntary payment features, inheritance
prompting a ‘continue with caution’ approach
protection, and downsizing protection are now
when appropriate.
widely available,” while interest reward products
While many of these practices predate
from providers like Standard Life Home Finance
regulation, leaders in the space agree that
(SLHF) and Just allow customers to reduce their
Consumer Duty has elevated the overall standard
interest rates based on how much interest they
and sharpened the industry’s focus since its
choose to repay. “The more interest that’s paid,
implementation in 2023. The direction of travel
the lower the rate becomes,” he explains, which
is clear: responsible advice is no longer just about
offers later life borrowers greater control and
compliance, but about anticipating complexity
long-term cost savings.
and ensuring every customer receives the
thoughtful guidance, regardless of circumstance.
Carter, who outlines Pure Retirement’s
own investment in being “empathic and
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for all customer-facing staff – says the advent of
charged or sudden, can place individuals in
The Intermediary | July 2025
An integrated approach
As the mortgage market adapts to an ageing
population and increasingly complex financial
