Following on from their joint presentation at the Later Life Lending Summit, hear from Mike Jones, Mewstone Financial and Darren Cunliffe of LiveMore as they share their perspectives on the evolving later life lending market.
What motivated you to participate in the Later Life Lending Summit and please share details about your presentation. What do you feel you have taken away from the experience?
I was motivated to participate in the Later Life Lending Summit because I believe the sector is experiencing significant change. With the rise of more affordability-focused and hybrid products, this is an exciting time for consumers to be better served by the industry.
I’m passionate about sharing knowledge from the conventional mortgage market with my peers, as I believe a holistic approach to advice, with everyone working toward a common goal, is crucial for the industry’s growth and success.
This presentation breaks down the story of Josie, who is returning to property ownership in her sixties and wants a solution that will allow her to repay her mortgage from her employment income over the next 15 years. Josie is one of the thousands of underserved clients who aren’t eligible for the LTV’s typically associated with Equity Release but has a good level of income available to commit to payments over a longer than usual mortgage term, often discounted by the high street lenders.
How can advisers provide holistic advice that addresses both the immediate financial needs and long-term goals of clients in later life?
The key to providing holistic advice is maintaining regular contact with clients, especially in later life. Circumstances can change quickly, and it’s important to ensure that any products recommended remain suitable over time. I also see an increasing overlap between pension provisions and borrowing needs. In the future, I believe more advisors will pursue advanced qualifications to better serve their clients’ evolving financial situations.
What are the key factors advisers should consider when collaborating with other professionals, such as lenders, solicitors, and surveyors, during the customer journey?
Collaboration across the different professionals involved in the later life lending journey can vary greatly due to differing motivations and industry roles. However, under the new Consumer Duty guidelines, it’s important that all parties adopt a more joined-up approach. Greater communication between these professionals will ultimately lead to better and quicker outcomes for clients.
Darren added that identifying for example, lenders that want to proactively lend to your later life clients is important, it is worth investing time with their Business Development Managers and wider teams to understand the opportunities available for your clients. Do they offer a broad product offering, what is their risk appetite and criteria, do they have maximum age limits, is their service good, also do they provide a later life specific offering that supports your clients in the shorter and longer term?
Importantly, does the lender make it easy? A solution like the LiveMore Mortgage Matcher®, makes a maximum borrowing calculation based on the client’s income and expenditure. It quickly sifts through more than 200 products to find a shortlist amongst a wide range of later life lending (equity release and non-equity release) products suitable for each individual’s requirements.
What challenges do advisers face when addressing the range of financial needs of clients approaching retirement or later life?
One of the biggest challenges is providing holistic advice across a wide range of needs, including pensions, care planning, and borrowing. Clients often expect their later life mortgage broker to guide them on areas like pensions or long-term care planning, but this can be difficult without the necessary qualifications. Upskilling within the industry is essential to support clients effectively without stepping into areas where the advisor isn’t qualified to give advice.
What are the current challenges and opportunities in the sector that could impact both advisers and their clients?
A key challenge for the sector is overcoming legacy issues around equity release, which can sometimes affect client engagement. However, the industry is making great strides in addressing this, particularly by framing equity release as a mortgage product with flexible features, such as the option to make payments or greater rates and LTVs for affordability-based products.
Darren concluded that more broadly, later life is becoming mainstream due to ageing demographics and changes in social structures. The bank of family is growing and projected to be £10bn by 2025 and £200bn in interest only mortgages are expiring over the next ten years. These three factors, amongst others present a major opportunity. As consumer understanding improves and innovations continue to enhance product flexibility, more clients will enter the market, which in turn will drive further innovation and growth.
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