Lynda Blackwell: The FCA should rethink its approach to later life lending

Ryan Bembridge

June 25, 2019

Former FCA mortgage policy manager Lynda Blackwell (pictured) has urged the regulator rethink its approach to later life lending after creating a divide between equity release and Retirement Interest-Only (RIO).

In March 2018 the FCA reclassified RIO mortgages as mainstream mortgages, which resulted in residential lenders like Leeds Building Society launching into the market.

However Blackwell, who was speaking at today’s National Later Life Adviser Conference at the Madejski Stadium in Reading, said there was a stark contrast between RIO rules around sales and advice compared to the “thorough and comprehensive set of rules” for equity release.

Blackwell said: “The regulator is causing real problems in the silo approach it takes to markets.

“The RIO situation really brought this home to me, especially given there is the same need for advice and support with RIO as there is with equity release, but it brought a residential approach to the rules [for RIO].”

Blackwell urged the regulator to “think about this again” and consider what it looks like from a consumer perspective.

Blackwell told the crowd that the FCA’s approach to RIO was “[to] help the big banks with a problem it had” regarding customers coming to the end of their interest-only deals, adding that the regulator was lobbied very hard by those big banks to adopt such an approach.

She said: “The FCA needs to look at this again, and the industry needs to lobby it to help with innovation in this part of the market.

“It has got halfway there with RIO, but some maneuvering is needed around the income requirements.

“We probably need to see a capital-based approach to affordability, not just income-based.”

Stuart Wilson, chief executive of Answers in Retirement Group, which rebranded today, backed Blackwell.

He said: “As a business we issue formal responses to all FCA consultations in this sector but as an industry we need to pressure the FCA on behalf of our customers.

“There need to be a recognition that customers are not coming from a siloed basis.”

And Will Hale, chief executive at Key Advice, added: “We need more constructive dialogue with the regulator.

“It hasn’t truly embraced the changes in the industry around product design and flexibility, and therefore we need to educate the regulator on this, but also that advice is aligned to bring about the best results for the customer.”

The Financial Conduct Authority was approached for comment.


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