‘Landmark decision’ to boost older borrowers
Nigel Waterson, chairman of the trade body, said the recent Financial Ombudsman Service ruling against HSBC would trigger changes in the market.
The bank was rapped for rejecting a mortgage application based on age grounds and Waterson believes this will be a turning point for lending to older borrowers.
“This could prove to be a landmark decision, one that paves the way for greater lender acceptance of borrowing in later life,” he said.
“With so many retirees facing financial hardship and life expectancies far longer than before, the current restrictions by some lenders on lending into retirement are outdated and unfair.”
Waterson said there were many people on interest-only loans who would need to repay their loans and that changes to the pensions market would also have an effect.
“A culmination of interest-only loans maturing, recent pension freedoms and tighter lending criteria have all placed funding in later life centre stage,” he added.
“For many older would-be borrowers the obvious solution is to hand, in the form of equity release. Our sector specialises in loans to the over-55s, and therefore has none of the issues currently plaguing older borrowers.
“Those at or nearing retirement age need options; until the age of 55 homeowners routinely remortgage to boost finances but after that point are increasingly restricted in their access to this – and other – forms of borrowing.
“For anyone experiencing financial worries we urge them to seek independent financial advice to ensure a thorough understanding of the options available to them, including equity release.”