Pete Thomson sales and marketing director of The Mortgage Lender
I can’t think of a time when the world has been more complicated or the pace of change for lifestyles has been greater.
What the average person’s life looked like in terms of marriage, mortgage, kids and retirement when I was lad, let alone when my dad was, is a far cry from what today’s youngsters face.
Getting a student grant, leaving university to walk in to a job with a final salary pension scheme, getting married, buying a house and having kids before you’d finished your 20s, and then retiring by 65 isn’t going to be a pattern many young lives follow anymore.
I don’t think I need to tell too many people that we’re marrying later, having kids later, retiring later or carrying a huge amount of debt out of university, or indeed that the cost of buying a home means lots of people are taking longer loan terms.
A recent survey by Mazars Private Clients said that roughly one in three of us make retirement plans and just one in 10 seeks professional retirement planning advice. Given the equity:age ratios we see in the Council of Mortgage Lenders’ data, I would hazard a guess that a lot of people are pinning their hopes on releasing some of that property value to make for a comfortable retirement.
It’s good that we’re having conversations about this across the industry and with regulators. The FCA has taken submissions and continues to talk ahead of publishing its Ageing Population Strategy in the summer but I hope that is not seen as an endpoint.
As a new challenger lender, we’ve set ourselves out to cover as much of the market as we can to start with.
We understand that there is a need for lending into retirement and we have what we believe is a fair position: where the evidence supports, we can lend to borrowers up to 80 years of age, considering them as retired beyond the age of 70.
We understand that age range won’t cover everyone but we think it’s about right for where the market is and where we are as a business – we haven’t even completed our first year. But we also recognise that we need to keep an eye on things, and they aren’t going to stand still.
So if you’re thinking, “TML should up its maximum age limit”, yes, we hear you but we’re comfortable the way we are… for now at least.