Why advisers should anticipate a significant increase in later life enquiries

"Advisers need to be in a position where they can have that comprehensive conversation on the wide array of options, not just lifetime mortgages or RIOs or mainstream options, but all of those."

Over the last decade or so, we became accustomed to Budgets and Autumn Statements which focused heavily on the ‘Baby Boomer’ generation, providing them with a considerable number of perks and advantages.

The Conservative Government of Cameron and Osborne, in particular, were often accused of pandering to this demographic, and while of course, both the two major parties remain committed to the State Pension triple lock, you probably wouldn’t say the most recent ‘fiscal events’ have been particularly pensioner-friendly.

Chancellor Jeremy Hunt’s Budget announcement this month was short of any policies which might be looked at in this way. Indeed, the Resolution Foundation suggested that pensioners were the ‘biggest losers’ from the Budget, facing a collective hit of £8 billion.

That comes from a combination of not benefiting from the 2p cut to National Insurance Contributions, and it also comes from personal tax thresholds not moving – even if the State Pension has increased – which means more pensioners are paying more tax as a result.

Indeed, with the lower tax threshold remaining at £12,570 and the State Pension moving to £10,406, individuals only need to receive £180 a month from a personal pension and they will be getting a tax bill.

This, of course, in an environment where the cost of living has continued to rise, even if inflation has come down off its double-digit highs, where pensioners tend to have fixed incomes and where increases in all ‘must pay’ bills such as food, energy, travel, etc, continues to eat deeply into their monthly funds.

Historically, of course, many older homeowners would have sought to ease this burden by selling their existing home, downsizing to something cheaper and smaller, and utilising the equity they had built up in their property.

Some might still do this, but this well-trodden path has had less people walking down it in recent years, for all manner of reasons, including the cost of moving.

In order to move this along, a number of considerable political heavyweights championed a stamp duty holiday or abolishing it all together for those older homeowners downsizing, but like many other property-related measures it never actually made it to the Budget announcement.

I’ve spoken before about cutting stamp duty for downsizing and how it might appeal to some older homeowners, in terms of encouraging them to move, but that it had to be married up with a supply of properties they want to move into. We’re all acutely aware of the lack of new bungalows being built, for example, and those older individuals wanting to leave larger family homes face the same supply-side issues that afflict all others looking to buy and/or move.

Of course, at the same time, large numbers of older homeowners facing the same issues in terms of pension provision, or who want to continue with a level of lifestyle, or want to help family members, or indeed need to fund care needs – the list goes on – have the same dilemma, but may also not wish to move from the family home.

It’s a combination of both want and need here, but whereas in the past the solution might have been solved via house sale and move, nowadays there are other options available in the later life lending space, that are becoming an increasingly popular way to help pensioners deal with these burdens and issues.

Let’s face it, regardless of who is in charge of the country’s finances after the next General Election, they are going to be facing a huge number of issues, which quite frankly, are going to need a huge amount of money to solve. Where does this money come from?

Pensioners and/or older homeowners are likely to face an increased tax burden, much like the vast majority of the working population in this country, and advisers should certainly anticipate a significant increase in the number of people who are looking to their largest asset, their home, in order to help them through such a period.

The good news of course is that we have a growing number of later life lending products and solutions to be able to offer, in what is going to be, a growing business opportunity. However, advisers need to be in a position where they can have that comprehensive conversation on the wide array of options, not just lifetime mortgages or RIOs or mainstream options, but all of those.

The Budget might well have been one for pensioners to forget, or perhaps the Budget that forgot pensioners, but we have options and solutions for them if they are finding any squeeze a little hard to take. Let’s ensure they’re aware of what those are and where they can get the advice they need.