Industry seeks collaboration and higher standards as later life lending goes mainstream
The Financial Conduct Authority’s (FCA) review of mortgage rules—including those of later life lending, which closed for public discussion on last week, is being viewed by sector leaders as a defining moment for the industry. With the UK’s ageing population and a growing pension gap, the review has brought renewed attention to the role of property wealth in retirement planning.
According to Kelly Melville-Kelly (pictured top), director of risk, policy and compliance at the Equity Release Council, the review “has the potential to be a watershed moment for the later life lending sector.” She noted that the FCA’s decision to recognise later life lending as part of the mainstream mortgage market reflects the realities of an ageing society and significant untapped wealth in housing.
“This review is a chance to make the safe use of property wealth a standard part of holistic retirement planning, while keeping the important safeguards and protections in place to ensure the best outcomes for consumers,” Melville-Kelly told Mortgage Introducer.
The Equity Release Council, she added, has long advocated for robust consumer protections, such as the no-negative equity guarantee and the requirement for independent legal advice. Melville-Kelly emphasised that these safeguards are fundamental to the sector’s credibility and growth. “Protection is the platform that innovation stands on. Without strong safeguards, you can’t have sustainable growth,” she said.
“The good news is later life lending already has protections you don’t find elsewhere – products that have tenure for life, capped or fixed interest rates, and independent legal advice. As an industry, we are leading the way with good consumer outcomes at the core.”
Looking ahead, Melville-Kelly expressed hope that the FCA’s findings would encourage more integrated and outcomes-focused advice for consumers. She called for “better alignment of mortgage rules, clearer qualification routes for advisers, and disclosures that inform not overwhelm consumers.” The council, she said, wants housing wealth to be more prominently considered when people seek retirement guidance, alongside pensions and other financial options.
To drive higher standards, the Equity Release Council has implemented several initiatives. In May, it launched an update to its standards, introducing a sixth Product Standard and a new Consumer Charter built around the principles of trust, tailored advice, thoroughness, and transparency. The council has also begun a mystery shopping programme to assess advice quality and is piloting a centralised oversight model to monitor standards across the market. “This has been an invaluable exercise to help us pinpoint areas where we can tweak the customer journey and standardise processes,” Melville-Kelly said.
Engagement with regulators remains a priority. The council holds regular meetings with the FCA and other stakeholders, including the Financial Ombudsman Service, to share insights and address emerging issues. It also collaborates with industry bodies such as UK Finance, the Association of Mortgage Intermediaries, and the Building Societies Association to present a unified voice on policy matters.
Melville-Kelly stressed the importance of collaboration across the sector to build a sustainable later life lending market. “Each part has a role to play, from lenders sharing data and designing flexible, responsibly funded products; advisers providing holistic guidance but referring clients to specialists when needed; and regulators and policymakers supporting innovation with industry and shaping policies that protect consumers without stifling innovation,” she said.
As the sector awaits the FCA’s recommendations, the focus remains on balancing innovation with consumer protection, and ensuring that later life lending continues to evolve as a trusted component of retirement planning.
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