Evolving borrower needs and product innovation are outpacing how brokers approach later life lending
Later life lending is no longer a specialist sideline, but many brokers have yet to adapt how they advise older borrowers.
For Andy Shaw, Head of Later Life Lending at SPF Private Clients, the shift has been driven less by product innovation alone and more by a steady, unavoidable change in client demographics. The trend is not unique to one firm, but reflects a broader shift across the mortgage market.
Shaw said the shift has largely been driven by a maturing client base, with many long-standing borrowers now entering the decumulation phase of their financial lives. That evolution has exposed a wider industry gap. Historically, SPF had avoided equity release, citing reputational concerns and limited demand. “You can’t dabble in something and pretend you’re an expert,” Shaw said.
But by 2019, as the firm reassessed its broader proposition, one question became harder to ignore: what happens when long-standing clients no longer fit traditional mortgage solutions?
Retirement shifts
The drivers behind later life lending’s rise are as much cultural as they are financial.
“Gone are the days of ‘hit 65, get a carriage clock, and stop,’” Shaw said. “People are working longer, retiring differently, and living differently.”
Clients who once expected to downsize are now reassessing those plans, often choosing to work longer and delay major life changes. Additionally, housing wealth is increasingly being pulled into mainstream financial planning, often via other professionals. Shaw pointed to a growing number of referrals from wealth managers, reflecting how housing wealth is now being considered alongside pensions, investments and protection.
That shift is changing how later life lending is used. Beyond supplementing income, it is increasingly supporting intergenerational gifting, inheritance tax planning and lifestyle decisions. He added that clients are becoming more comfortable using housing equity to support those goals, with less concern from families about the impact on inheritance.
The borrower profile is also broadening. “This is no longer just the stereotypical asset-rich, cash-poor client,” Shaw said. “We’re seeing high net worth individuals using these products for refinancing, tax planning and lifestyle purposes.”
Advice gap
Much of the sector’s progress has been underpinned by product development, particularly in addressing long-standing concerns around equity release.
“There’s far greater transparency now,” Shaw said, pointing to fixed early repayment charges and shorter penalty periods. “You’re no longer dealing with decades of uncertainty.”
He also highlighted increased flexibility, with borrowers now able to make voluntary repayments, either regularly or on an ad hoc basis, rather than relying solely on interest roll-up.
Consumer protections, including portability and defined repayment options on death or entry into care, have also strengthened confidence in the market. Yet despite these improvements, advice models have not kept pace.
“There’s still a huge educational piece,” Shaw said. “Misconceptions about equity release haven’t gone away.”
More critically, he highlights a structural imbalance in how advice is delivered.
“I think it’s slightly problematic that mainstream brokers won't always consider lifetime mortgage options when advising older borrowers,” he said.
That imbalance, Shaw suggests, risks leaving clients without a full picture of their options, particularly as borrowing in later life becomes more embedded in retirement planning. Across the market, firms without in-house expertise face a clear decision.
“If you’re not going to advise on it, you need strong partnerships and clear signposting,” Shaw said. “It can’t just be, ‘Here are your mainstream options – go and work it out for yourself.’”
As later life lending moves into the mainstream, the question for brokers is no longer whether to engage with it, but how.
