Later life lending advisers see greater demand from clients during Covid-19, more2life research shows
Around a quarter (26%) of advisers have had older clients get in touch because they are worried about how the pandemic will impact their pension savings and are keen to understand what their financial options are. Over one-fifth (23%) of advisers said that their clients have got in contact with them due to fears around falling property values.
Indeed, recent data** shows that nine in 10 (89%) people who are saving for retirement or currently retired saw the value of their pension pot fall by an average of 15.2% in the first quarter of 2020. House prices have also fallen as a result of the pandemic, with the latest figures from Nationwide*** showing house prices were down 1.7% in May month-on-month.
Uptick in Demand for Advisers’ Services During Covid-19:Over half of advisers (57%) said clients have been happy to speak to them about their financial plans, though many have been reluctant to make any major decisions during the current uncertainty.
A quarter (26%) of advisers agree that the increase in demand for their services has been because clients have had more time to think about their finances. Interestingly, adviser firms specialising in equity release said this the most out of any adviser firm – 78% of equity release firms with over 30 independent financial advisers (IFAs) said this, as did 72% of equity release firms with under 30 IFAs.
Perhaps worryingly, a mere 7% of advisers said that existing customers who have used equity release previously have been in contact to understand how the coronavirus outbreak will impact them.
Dave Harris, Chief Executive Officer at more2life, comments: “Today’s research reinforces why advisers are so important – they are a source of reassurance and support for clients during turbulent times. With a significant number of later life lending advisers saying their clients have been in touch during the pandemic, it’s clear that people are turning to advisers to get guidance on how to navigate the current uncertainty. Specialist advisers are uniquely placed to be able to take a holistic view of a client’s finances and circumstances to ensure they choose the most appropriate solution for them. Going forwards, it will be crucial that advisers are supported by lenders and other key players in the later lending space to ensure they have the tools and resources to support their clients in the best way possible.”
Further Market Innovation Post-Pandemic:A notable proportion of advisers agree that older borrowers are keen to see further product innovation in the later life lending market following the coronavirus pandemic.
Close to a third (32%) of advisers in more2life’s survey said that clients would like to see later life mortgages which can convert into equity release plans, while a further 20% think that customers would like to see more products which would allow them to take small, regular drawdowns to pay for their retirement. This follows a growing trend for drawdown equity release plans over recent years. According to the Equity Release Council’s latest market report, there was a 49% increase in the number of drawdown products available between January 2019 and January 2020 alone.
Moreover, almost a fifth (19%) of advisers reported that customers would like to see a more holistic approach to advice in the later life lending sector which would cover both pensions and property.
One in ten advisers (10%) said their clients would like greater access on how to manager debt in later life, whilst a further 9% of advisers said clients want equity release products with a regular income to pay for care at home.
Dave Harris concludes: “Over recent years, advisers have been increasingly hearing from customers that they would like to see more flexibility from later life lending products – and the coronavirus pandemic has clearly accelerated this demand. As the market progresses, it will be vital that product innovation continues to be a top priority for lenders, to ensure that an ageing population can access the financial solutions they need.”