The Intermediary – May 2025 - Flipbook - Page 64
L AT E R L I F E L E N D I N G
Opinion
his year, L&G Home
Finance celebrates a
decade since its entry
into the lifetime
mortgage market.
During this time,
L&G has helped more than 100,000
customers release over £6.5bn of
equity from their properties. Over this
period, the later life lending sector
has evolved significantly, in large part
due to the rapidly evolving needs of
customers across the country.
With people living longer and
property values continuing to hold
or increase their value, aitudes to
property wealth continue to change.
Looking holistically at retirement
income options, including any value
tied up in bricks and mortar, is likely
to become more the norm.
As later life lenders and
intermediaries alike look for
opportunities to innovate to best
meet the needs of customers, there
are certain trends that are set to
either emerge or accelerate in the
years to come.
T
Diversity of product
Ensuring customers have sufficient
choice is a cornerstone to achieving
beer customer outcomes. If
customers can choose from a
range of varied and meaningfully
differentiated products, they can, with
expert help, opt for the product that
best suits their individual needs. This
fact has not been lost on the later life
lending sector.
According to the Equity Release
Council’s (ERC) most recent Q1 2025
data, advisers could choose from more
than 1,200 products and plans. This
compares to the almost 300 product
options recorded in 2019.
It’s this same customer-centric spirit
that has driven L&G Home Finance
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The Intermediary | May 2025
to keep innovating. In 2018, L&G
launched the first interest-servicing
lifetime mortgage. The Optional
Payment Lifetime Mortgage (OPLM)
allowed customers to pay some, or all,
of the monthly interest, but also to
stop paying at any time.
In 2023, we introduced the
Payment Term Lifetime Mortgage
(PTLM), a first-of-its-kind product
designed to give additional choice to
borrowers at the slightly younger age
of 50, whose needs oen fell between
existing options.
These are just some of the ways
L&G has continued to evolve Home
Finance over the past decade –
launching new products, seing up
in-house financial advice in 2019,
and developing strategic partnerships
with several major banks to bring
housing equity into residential
mortgage conversations.
A mainstream source
The ERC’s Q1 2025 data demonstrated
a growth in total lending for a fourth
consecutive quarter, suggesting that
equity release remains a popular way
for people to boost their retirement
income by tapping into their
property wealth.
As people live longer, the pressure
is on to ensure that their pension pots
can keep up, with every penny of
retirement income required to stretch
that bit further. It’s no surprise that
ever more people will be looking at the
wealth built up in their homes to see
if it can help provide the rewarding
retirement that they had envisioned.
This is also driven by the ongoing
increase in the value of property
which, according to L&G analysis of
Office for National Statistics (ONS)
data, has seen house prices in England
and Wales increase by 20% over the
past five years.
LORNA SHAH
is managing director,
retail retirement at L&G
L&G’s analysis suggests
homeowners could nearly double
the amount of money they have on
hand for retirement by using their
property wealth, as the amount the
average homeowner could access from
lifetime mortgages was comparable
to the average pension pot at the point
of retirement.
Value of advice
Financial advice will continue to
play an essential role in ensuring
that customers get the retirement
outcomes that best match their
circumstances. As more advisers
look to generate the best outcomes
for clients, the value of property
wealth will increasingly be up for
consideration.
Equity release may not be right for
every client, and even if it is right for
them, it’s critical that they are guided
through the many product variations
to ensure that they opt for the solution
that best allows them to achieve their
retirement goals.
Later life laurels
Over the past 10 years, the industry
has come a long way – product choices
are more meaningfully diverse, the
