The Council for Mortgage Lenders (CML) has called on the Treasury to introduce tax relief on professional advice at retirement as part of a wide ranging report on borrowing in retirement.
The report itself outlines a range of areas where regulators, government and the mortgage industry can act to improve the mortgage market for older customers who are looking to borrow for a variety of reasons.
According to the study titled “Retirement Borrowing: Reality, Perceptions, Projections and Potential”, there is an ever-growing potential market of older people, but lending to those in retirement has been falling for much of the last decade.
The report said: “Equity release is, and will continue to be, the answer for some, but for the lending solutions to meet the wider requirements for in retirement lending especially, further innovation will require new funders and collaboration between funders and specialist manufacturers, to ensure that new products are meeting the innovative demands of the wider retirement lending sector.”
It goes on to say: “We ask HM Treasury to explore the provision of tax relief on professional advice received at retirement, to encourage more customers to make the most appropriate, soundly based and realistic plans for their circumstances.”
The report considers many of the needs of older people borrowing around housing, from lifetime mortgages and equity release to downsizing.
CML Director General, Paul Smee, said: “There is no silver bullet to address the complex issues involved in the housing and financial needs of older borrowers, but it is hugely significant that so many willing participants from across the mortgage industry and beyond are now collaborating to try to put this jigsaw together.
“We should push forward on the more straightforward issues – such as improving advice hand-offs, using the Pension Wise trigger point to address housing and debt issues, focusing on good product design, and a regulatory focus on avoiding negative unintended consequences on retirement borrowing.
“A truly holistic approach will take longer to emerge. But there is enthusiasm to work together to address the issues. We must maintain this momentum.
“Through collaboration we should aim for consistently good advice, sensible housing solutions, and products that offer the financial outcomes that many older consumers are looking for, without disproportionate risk to lenders and advisers.”
