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Call for ‘radical’ mortgage/pension solutions

paulajohn
Written By:
paulajohn
Posted:
Updated:
17/09/2013

An expert has urged industry to build radical integrated mortgage and pension products.

George Higginson, CEO of mortgage adviser network Sesame Bankhall told Your Mortgage that financial services legislation treated different products separately, but this did not reflect the way older consumers viewed their house and their pension.

He called for lenders to work with regulators and other industry leaders to create more integrated products:

“We do not get people saving for retirement because they are not interested. Why couldn’t you have someone using a pension to save up money, and then using it as a deposit for a house?

“We also need to think over more radical solutions, where people have mortgages that run into retirement.”

He called on mortgage bosses to follow the example of the pensions industry and create products that were flexible beyond the age of 65 and questioned the assumption that older borrowers would downsize to release cash:

“It might be financially right if someone downsizes, but emotionally they do not want to leave.”

In other countries, mortgages could be attached to the house and passed on as a form of intergenerational debt, he added.

First-time buyers believe tax-free wrappers designed specifically for deposits would be more effective than government schemes at helping them onto the housing ladder, a Building Societies Association poll found earlier this year.

In the March Budget, the government said it would explore the possibility of allowing buy-to-let investors to hold properties within the tax-free wrapper of a personal pension.

However, the government’s aim to rejuvenate town centres meant only property converted from commercial use would be considered.


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