The Council’s Later Life Lending Summit addressed one of the key drivers for financial services as well as for the individual and collective prosperity of the UK and its citizens. Our ageing population creates multiple demands on current and future taxpayers – principally for pensions, health and social care and other age-related benefits. At the same time, we have a vast pool of wealth held in housing and a shortage of housing for younger people as they bring up families. In many cases, our home-owning older population is asset-rich and cash-poor, or living in homes that are hard to maintain, heat or impractical in other ways. Yet for many people, their home is the largest asset in their retirement balance sheet as well as a powerful emotional anchor.
So, there is a disconnect, which the paper presented by James Daley at this year’s Summit sought to address. First, we need more housing choice that works for older people, creating more choice and freeing up unutilised space for those coming up the ladder behind them. Then for those for whom downsizing – or more accurately, “rightsizing” – is not the right option, we need ways to help them make the best use of that main asset, including through Lifetime Mortgages or Equity Release. Choice is at the heart of this, and nobody should be forced to make a decision they may later regret. But good choices can be helped by better incentives, and the proposal to offer a Stamp Duty reduction for “rightsizers” is clearly in the public interest, as housing chains can be unlocked. We also need high quality choices, both of houses and of reliable, competitive financial products in this space. Many of these were showcased at the Summit, and the Equity Release Council’s rigorous focus on advice and standards over many years has significantly shifted the dial on product reputation and perception over the years.
Making the best use of housing to improve quality of life across the whole lifespan is something we have to address, given the way our demographic curve is shifting. The Summit is the best forum to bring together the leading thinking on this crucial issue, so many thanks to David Burrowes, Chris Pond, and Jim Boyd for their genuinely world-leading work as evidenced at another brilliant Summit.
