Borrowers in the later life lending market need coordinated action by industry, government and regulators to ensure higher retirement standards, a report says.
The UK’s £5trn housing wealth can help address major challenges facing the UK’s ageing population — such as funding social care costs, aiding intergenerational wealth transfers and retirement income shortfalls, says the study called Later Life Lending: Great Expectations.
The report, commissioned by the Equity Release Council and written by About Consulting Group director Jon Dunckley, sets out 21 recommendations across four key areas – government policy, regulation, industry and consumer education.
The report follows a record year for the industry, when 93,421 homeowners aged 55 or older used new or existing lifetime mortgages to withdraw £6.2bn of property wealth in 2022.
Legal & General Home Finance chief executive Craig Brown says: “Our recent Equity Economy research showed that whilst one in 20 homeowners currently used equity release to fund retirement, this is anticipated to almost double to one in 10, or 11%, based on the anticipated plans of younger homeowners.
“At the same time, attitudes to the home as traditional inheritance are also changing, with many homeowners seeking to access equity at a time when it’s most valuable, for example, as a gift to a younger relative looking to buy a home.
He adds: “To reflect these changes, and meet evolving customer needs, lenders and advisers both have a responsibility to ensure customers are able to understand and access a complete range of products suitable to their needs or, at the very least, a solid and diverse network of referral contacts, to broaden the range of products they can advise on.
“We welcome any effort to create a more consistent experience of financial advice to provide homeowners with a full range of relevant options.”
Report author Jon Dunckley points out: “There is huge scope for property wealth to offer real solutions to today’s financial challenges on an individual and societal level.
“For that to happen we need to develop a more joined-up approach, from government to regulators and advisers.”
Equity Release Council chair David Burrowes says: “This report provides essential, and most importantly, objective clarity on the challenges to build on the flexibility and product innovation that has emerged over the last decade.
“The social benefits of accessing property wealth are beyond doubt, but as this report shows, there are still multiple barriers to overcome.
“The council is dedicated to working with members, industry, policymakers and the regulator on coherent, consumer-focused solutions so the later life lending market can fulfil its potential.
“Greater coordination and collaboration across political, regulatory and industry stakeholders are essential.”
