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Cross-party collaboration needed on older borrowers


The challenges we face in addressing older borrowers’ needs require many perspectives and cross-party collaboration

The FCA’s discussion paper on retirement has sparked much needed debate on what is fast becoming one of the most important issues for our industry. We welcome the engagement from the regulator and remain committed to delivering products and services that meet the needs of older people.

The challenges we face cannot be met in isolation. Many perspectives are needed and the overarching message of the FCA, which we support, is for collaboration between the financial services industry, regulators, the Government and representative organisations for older consumers.

A few points instantly emerge: There is a very limited cohort of advisers that cover both residential and lifetime advice. Advice is segmented due to different regulatory regimes, types of adviser and product heritage. There will need to be a more holistic, streamlined approach if we are to make the consumer experience a smoother one.

The industry will need to innovate to meet older borrowers’ specific needs, in particular harnessing the benefits on offer via the digitisation of services and distribution channels.

The effect of pension freedoms is still evolving but we agree with Which?’s view that there should be an increased role for the generic advice services. Lenders will happily assist Pension Wise in developing a more detailed approach to take into account mortgage/housing debt issues alongside pension pot decisions.

Prudential requirements may also unintentionally create barriers for firms seeking to develop financial services markets. We recommend closer co-ordination between the PRA and the FCA to consider a sensible approach that may entail some liberalisation of current rules, while still maintaining regulatory standards.

Finding safe and appropriate ways of lending to older people – in line with their needs and aspirations – which sit within a wider framework of advice and service provision across financial services is a key objective of lenders.

We would welcome further leadership from the FCA, the PRA and HM Treasury to help this important agenda make further progress.

Paul Smee is director general at the Council of Mortgage Lenders



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  • Carl McGovern 19th May 2016 at 3:01 pm

    Lifetime Mortgage providers are comfortable with the concept of a Mortgage being discharged on sale of a property. This is normally on death or on the customer going into long term care. It can also be discharged on the sale of a property.

    When speaking to the providers of a traditional Mortgage, it seems that they don’t like the idea of a Mortgage being discharged from the sale on death. This appears to be a major sticking point, when lending to older borrowers. It still seems strange that we have lenders like the RBS group, who have an expiry age of 70. Surely if other lenders are now taking a more sensible approach to lending beyond this age, they need to consider this too. They aren’t on their own and if Pension Income is sufficient to support a Mortgage, why have a maximum age at all?