More than 80% of clients prioritise low interest rates when considering a lifetime mortgage, according to research by Pure Retirement, facilitated by Smart Money People.

Despite ongoing economic challenges since the 2022 ‘Mini Budget’, 82% of advisers surveyed reported that interest rates remain the most significant factor influencing client decisions in later life lending.

The study, conducted with over 160 advisers, aimed to assess current trends in the later life lending sector. Beyond interest rates, advisers noted that clients frequently ask about the ability to make optional monthly interest payments (41%), the no negative equity guarantee (39%), and downsizing protection (24%).

WHAT ADVISERS VALUE

When considering which lenders to refer, advisers cited customer support (51%) as a key factor, followed by a preference for trustworthy and reliable lenders (46%). Product innovation (37%) was also highlighted as an important consideration.

However, advisers continue to face challenges in client understanding of equity release products. 66% of respondents said misconceptions about lifetime mortgages present the biggest obstacle when advising clients. To address these knowledge gaps, advisers suggested printed guides (58%), increased TV visibility (36%), educational videos (34%), and a stronger presence in industry press (33%) could help improve public understanding.

KEY CHALLENGE

Scott Burman, head of distribution at Pure Retirement, said: “These findings demonstrate how importantly consumers continue to view rates, even amid the challenges being faced in the wider economic landscape for lenders. Additionally, they show encouraging levels of understanding of the product, with nearly four in 10 advisers reporting being questioned about the no negative equity guarantee.

“However, those same advisers also highlight the lack of client understanding being a major challenge to overcome when advising, showing the fact that despite the increasing mainstream appeal of lifetime mortgages we’ve still got work to do as an industry to widen that comprehension through a variety of different channels.

“Additionally, the findings serve to underline the importance that advisers place on customer service and reputation, highlighting the extent to which they value the peace of mind in placing their clients in safe hands, and how vital it is to maintain a customer-first mentality across the sector.”