It seems ironic that, at a time when the traditional notion of a ‘retirement age’ has changed considerably with many people choosing (or having) to work beyond 65, those aged just 55 can freely access their pension pots.
Perhaps the developments herald far-reaching changes about what retirement age means, what is appropriate and responsible lending to this age group and how other products, such as equity release, can fit into planning.
There appear to be two, perhaps interlinked, mortgage areas that are likely to show continued strength: buy-to-let and lending into retirement. A number of big lenders’ product development teams have been considering this issue for some time – not surprising given their concerns about the scale of interest-only loans held by their borrowers, many of whom have not addressed the issue of repayment.
Lenders are reacting to demographic and societal changes around lending to older customers and they understand that the power (and demand) wielded by the ‘grey borrower’ is likely only to increase.
So advisers are in a perfect place to support and develop older-client relationships to a point where they are the first natural port of call for perhaps a new generation of property-savvy retirees.