The Intermediary – October 2025 - Flipbook - Page 71
Harper sees the same risks playing out across
families, saying: “Families with mixed income
streams, the self-employed and renters often lack
an adequate financial safety net if illness or
death occurs.
“Too many have little or no emergency savings
or backup plan, and the self-employed, in
a clear fall off in their knowledge levels, and this
often leads to inaction.”
Unique needs and risks
For these borrowers, the lack of employer benefits
or state support is a critical vulnerability.
Lakey adds: “Those with adverse credit histories
particular, cannot rely on employer benefits or
who might be denied a traditional mortgage
much support from the state.”
are also typically required to pay a much higher
Mike Farrell, protection sales and marketing
interest rate. This means that the impact of a
director at LV=, says: “Protection, in all forms,
loss of earnings in these scenarios will be felt
remains a vital part of financial planning. Clients,
more harshly.”
whether employed, self-employed or facing
Steve Griffiths, commercial director for retail
complex financial circumstances, need cover that
mortgages at Shawbrook, agrees that the self-
reflects their individual risks. Delivering this
employed face unique hurdles.
requires insight and adaptability.”
A new landscape
At LifeSearch, Harper has seen a shift in who
He says: “The incomes of self-employed
individuals are often not as consistent as
those of standard borrowers, and these
fluctuations can often make them appear to be
seeks protection advice. “We operate a partner-
unreliable borrowers, or too risky to lend to by
based model in which most new customers are
mainstream lenders.
referred by other brands,” he says.
“Since the introduction of Consumer Duty,
“Their incomes are also more likely to be
immediately impacted by economic pressures,
we have seen rising referrals from advisers in
Government policies and taxation, which
adjacent sectors such as mortgages, general
could translate into to cashflow issues directly
insurance and wealth planning.”
impacting their income.
These ‘non-vanilla’ clients are not a niche; they
“Many of these risks exist beyond their control,
are the new mainstream. They include the builder
but the majority of business owners take the
who works as a subcontractor, the freelancer with
necessary steps to mitigate them, and this
multiple income streams, the retiree seeking
highlights the need for specialist providers and
later life funds, and the family that has bounced
lenders who understand that, while their needs
back from historical credit issues.
are different to standard borrowers, they should
Lakey points out the complexity these
borrowers face, saying: “The self-employed are
be supported in the same way.”
Harper adds: “More conversations now focus
at the mercy of circumstance, particularly those
on keeping cover realistic rather than cutting
in higher-risk occupations such as builders and
it altogether, using shorter terms or reduced
drivers, etcetera. With later life lending, there is
sums assured to stay protected. And certainly,
p
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