Air Mortgage Club encourages re-education on later life lending

Jake Carter

November 2, 2021

mortgage education

Air Mortgage Club’s ‘Later Life Lending Census’ has led the business to call for re-education of both advisers and consumers on what the later life lending market is and can offer.

While 94% of respondents said the concept of ‘later life lending’ meets a genuine customer need, 76% said consumers have limited understanding of the market and 43% said the same was true of advisers.

71% of respondents said consumers attach a negative image to equity release, while 68% felt most consumers see later life lending products as ‘a last resort’.

As a result, 56% of advisers said the most challenging part of the process with clients was ‘customer reassurance and managing misconceptions’, scoring above ‘meeting regulatory and compliance requirements’ (54%), ‘managing vulnerable customers’ (49%), and ‘customer acquisition’ (43%).

As well as this, 77% said a competitive interest rate was most valued, this was followed by the flexibility in how they receive the money (76%), the flexibility of repayments (71%), and the no negative equity guarantee (60%).

However, when advisers were asked what were the top areas within the later life lending sector which required innovation, 74% said ‘consumer education’ and 28% said ‘CPD/adviser education’.

Stuart Wilson, chief executive at Air Group, said: “The Later Life Lending Census has brought to light a number of key areas which we certainly need to tackle if we are to grow this market and make the most of the underlying fundamentals which should trigger demand.

“Anyone who has worked within the equity release market for any length of time, will know that one of the biggest challenges has been around consumer education about what the products can do and what they don’t do, the responsibilities that come with those products, and what they ultimately mean and require over the term of those products.

“Tackling misconceptions and misinformation has been a constant struggle – one which the Equity Release Council in particular has fought for many, many years.

“However, it’s clear that from both a consumer and (to a lesser extent) adviser viewpoint, this is a ‘battle’ that remains ongoing.

“If anything, with the growth in the number of later life lending options available, it’s one that requires even greater resources.

“There is a tendency to see later life lending only through the prism of equity release, when of course there are many more options available outside of just lifetime mortgages, plus the features of equity release products themselves offer much more flexibility than ever before.

“In a way we need to re-educate ourselves and consumers to look at later life lending holistically and to continue to tackle the mindset of those who believe the products available are limited and/or still those of yester-year.

“Air Mortgage Club will seek to provide advisers, their clients, and the wider market with access to support and information which should go a long way to ensuring we have a much more educated stakeholder group when it comes to the later life lending market and the solutions available.”

Sign up to our daily email