The UK’s largest equity release adviser, Key Later Life Finance, has welcomed the Financial Conduct Authority’s recent remarks on later life lending as a “hugely encouraging” step towards more joined-up financial advice—but warns that further regulatory change is urgently needed to deliver on that promise.
In a keynote speech delivered at the JP Morgan Pensions and Savings Symposium and published on 28 March, the FCA’s chief executive, Nikhil Rathi, called for an end to the “fragmented journeys” that treat pensions, mortgages, savings and housing wealth as isolated financial challenges. “If we continue to treat pensions, mortgages, and savings as separate tracks, we will miss opportunities to help consumers get where they need to be,” he said.
While the speech marked a notable shift in tone towards recognising the central role of property wealth in financial planning, Will Hale, chief executive of Key Advice, said that more concrete action is required. In particular, he called for the FCA to expand the scope of its ongoing Advice Boundary Guide Review (ABGR), which is currently focused only on pensions and investments.
“The FCA is recognising the important role of property wealth and the later life lending market and the speech by Nikhil Rathi is hugely encouraging,” said Hale. “His most important insight is that there is a need for joined up advice across the market, supporting the requirement for the consideration of all options, but so far the scope of the AGBR work is limited to pensions and investments. That needs to be extended to include consideration of property as soon as possible.”
Hale noted that the FCA’s proposed “Targeted Support” model, which aims to bridge the gap between generic guidance and regulated advice, could offer a framework for delivering better outcomes across a broader spectrum of consumer needs. However, as it stands, the proposals do not cover later life lending.
Rathi’s comments suggested a growing recognition within the regulator of the financial significance of housing wealth, particularly in retirement planning. He observed that for many consumers, their home is their largest financial asset, and that—with the right safeguards—later life lending could play a more constructive role in financial plans, rather than being seen purely as a last resort.
Hale argued that this perspective is long overdue. “The speech recognises that how and when people access their housing wealth is increasingly important,” he said. “It’s welcome rhetoric and all the points mirror those that the later life lending sector has been making for some time. But more pragmatic action is required to remove advice silos, to grow people’s awareness of the options available to them and to reduce the costs involved in acquiring and serving customers so outcomes can be improved.”
According to Key, substantial housing wealth held by older homeowners represents a largely untapped resource that could help address intergenerational financial pressures, including supporting retirement incomes and helping younger family members onto the housing ladder. Such uses, Hale argued, would be consistent with the government’s broader growth agenda.
While the industry waits for the FCA and government to lay the groundwork for more integrated advice models, Hale insisted that market participants cannot afford to wait passively. He called on intermediaries, wealth managers and mortgage advisers to collaborate more closely to ensure older homeowners are properly informed of all the financial tools available to them.
“It is important that mainstream mortgage advisers, generalist IFAs/wealth managers and later life specialists work in close collaboration so that older homeowners are made aware of all their options and achieve consistently good outcomes,” he said.
