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Comment: The age of enlightenment

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Like lenders, protection providers are raising maximum ages to reflect our ageing society and people’s lifestyle changes

Mortgage lenders, like everyone else, have recognised that we live in an ageing society. As a result, recently a number of them extended their maximum borrowing age, to 80 or even 85 in some cases.

In particular, lenders have relaxed their criteria for older customers who want to move house or release equity in their retirement. This comes hot on the heels of the FCA’s recommendation that more should be done to support retirees with their mortgage needs.

Of course, it is not only older borrowers who need help in this area. As house prices have kept increasing in recent years, it has become harder to reach even the first rung of the property ladder, with many people waiting until their late 30s or early 40s as a result.

Many borrowers, therefore, need a mortgage with a term that takes them past the state retirement age. Having a mortgage to pay off while in retirement is never ideal, and brokers and advisers must consider this carefully when customers come to them with the strategy in mind.

With mortgage terms growing, it is important for borrowers to review their level of protection.

Thankfully, protection providers too are increasing the maximum ages on their plans to reflect lifestyle changes. Borrowers can now take out a term life assurance that runs until age 90, critical illness insurance up to age 85 and income protection up to age 70.

Brokers must also consider the needs of customers with debts or financial dependants, or those working beyond state retirement age, because their insurance needs are likely to last longer as well.

It is great to see lenders being more innovative with products but brokers have a key role to play here too. It is vital to have regular conversations with clients to ensure all their financial decisions meet their specific needs.

Toni Smith is sales operations director at First Complete

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