Sanjay Ghadia from Standard Life Home Finance delivered a thought-provoking presentation at the Later Life Lending Summit discussing how the market is transforming with innovative products, regulatory shifts, and evolving client needs. Read more to discover how advisers must navigate these changes to deliver responsible, personalised solutions that achieve good outcomes.
The modern later life lending market is undergoing rapid change, driven by shifting customer demographics, regulatory updates, and the introduction of innovative new products. In this evolving landscape, it’s essential to stay attuned to key trends and understand how these changes may impact outcomes for your clients.
One of the most significant trends is the growing demand for flexible solutions tailored to the specific needs of older clients, who are facing economic realities including inadequate pension savings, longer life expectancies and increased costs of living, and wish to tap into their property wealth.
Product innovation is enabling customers to make repayments and to be rewarded in return with lower interest rates, and or access to higher LTVs on the latest generation of lifetime mortgage products e.g. payment-term and interest-reward lifetime mortgages. This broadens the range of choices available to clients looking to unlock property wealth and fund their retirement, and can support them in lowering their total cost of borrowing, mitigating the impact of compound interest
When considering these new products, there is an increasing responsibility placed upon advisers to discuss affordability and responsible lending. It is crucial for advisers to assess the total cost of borrowing for their clients and not just look at the immediate financial needs but consider the long-term impact of making repayments. Helping clients understand how repayments will influence their future cash flow and overall cost of borrowing ensures that they are equipped to make an informed decision.
The introduction of consumer duty and updates from the Financial Conduct Authority has prompted a re-examination of how financial advice and lending products are offered to individuals over 50. This has highlighted the need for more educational resources and customised tools to help advisers consider these new products and take a holistic approach to later life planning.
As the market continues to evolve, staying informed about these changes and incorporating a comprehensive approach to financial planning will be crucial for advisers seeking to provide responsible and effective guidance to their clients. Ultimately, this shift offers an opportunity to help clients achieve a more personalised and positive financial outcome.
