The Intermediary – July 2025 - Flipbook - Page 22
L AT E R L I F E L E N D I N G
In focus
o quote Billie Burke,
“Age is something that
doesn’t maer... unless
you are a cheese!” Or
trying to navigate the
financial planning and
lending journey that seems to get more
complicated as we all get older.
The lending market for individuals
aged 55 and above, extending to
mortality, has evolved into an
exceptionally intricate domain,
presenting considerable challenges for
both mortgage advisers and financial
planners. This complexity stems
from a confluence of demographic
shis, regulatory demands, and
the increasing diversity of financial
products, creating an environment
where a single adviser can no
longer realistically maintain expert
proficiency across all relevant areas.
First, the demographic landscape
itself is a primary driver of this
complexity. People are living longer,
oen carrying mortgage debt further
into retirement, and facing varied
financial circumstances that defy
simple categorisation.
Unlike previous generations, who
might have paid off their mortgages by
retirement, a significant proportion
of those aged 55 to 64 still have
outstanding mortgage balances. This
necessitates a broader spectrum of
lending solutions beyond traditional
residential mortgages, including
retirement interest-only (RIO)
mortgages and various forms of equity
release, such as lifetime mortgages.
Each of these products comes with its
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The Intermediary | July 2025
own unique set of criteria, risks, and
implications for income, inheritance,
and long-term financial security.
Regulatory scrutiny
The regulatory environment adds
another layer of intricacy. The
Financial Conduct Authority (FCA)
places a high onus on advisers to
demonstrate that advice is suitable
and personalised, especially for
vulnerable clients – a category that
oen includes older individuals. This
requires comprehensive due diligence,
meticulous record-keeping, and a
deep understanding of how different
products interact with an individual’s
entire financial picture.
Recent FCA reviews have
highlighted concerns about poor
advice and misleading promotions
in the later life mortgage market,
underscoring the need for advisers
to move beyond a siloed approach
and consider all available options,
not just those within their
immediate specialism.
The Consumer Duty, introduced
by the FCA, further reinforces this,
requiring firms to act to deliver good
outcomes for retail customers, which
in later life lending means exploring
a wider range of solutions beyond just
equity release.
Constant evolution
The ‘myriad of options’ is not merely
a figure of speech. It’s a stark reality.
For individuals over 55, financing
needs can range from remortgaging
an existing property to fund home
ANDREW TEEMAN
is business principal and later
life mortgage specialist
at Mortgage Advice Bureau
improvements, consolidating debt,
providing financial assistance to
family members, or supplementing
retirement income.
This diverse set of objectives calls for
an equally diverse range of solutions.
Traditional residential mortgages
may still be an option for those with
sufficient demonstrable income, but
oen with stricter age caps.
RIO mortgages allow homeowners
to pay interest-only, with the capital
repaid from the sale of the property
upon death or entry into long-term
care. Lifetime mortgages offer a way
to release equity without monthly
payments, with interest rolling up,
but can significantly erode the value
of the estate.
Beyond these, there are also
specialist products from smaller
building societies and niche lenders,
each with specific criteria regarding
income sources – for example,
pension, rental income, investments
