The BSA welcomes the publication of the FCA’s Ageing Population and Financial Services paper today. It represents an important first step by the regulator in encouraging the lending community to respond to the changing demographics by broadening the range of products available to those in or nearing retirement.
It also recognises the challenges of providing the services and support the older customer needs to continue to run their finances while also protecting them from financial crime and abuse.
The paper highlights the stark demographic changes we face as a country and some of the product gaps that currently exist, particularly in later life lending. It also builds on the market leading work and analysis carried out by the BSA and its members since 2015.
Paul Broadhead, Head of Mortgage Policy at the BSA said:
“Building societies have been at the forefront of driving change in the provision of financial products for the needs of older consumers. Over the past couple of years, the number of societies offering mortgages that will extend into a borrower's eighties and beyond has almost doubled.
“But this market will continue to grow dramatically and as we have repeatedly argued, other lenders will need to follow suit. The FCA cites research in its report that the share of borrowers aged 65+ is set to go from 1 in 6 currently to 1 in 4 by 2050. A third of babies born today can expect to celebrate their 100th birthday.
“Earlier this year the BSA commissioned research from the International Longevity Centre which found that mortgage debt in the over 65s is set to almost double, to around £40bn by 2030. It is refreshing to see a regulator committed to looking long-term at the societal changes occurring with the way we buy our homes - and the ageing population more broadly. The regulator has already taken welcome steps in consulting on changes to Retirement – Interest only mortgages that is likely to help many borrowers.
“We will continue to work with the FCA and other stakeholders such as the Treasury, Age UK, mortgage intermediaries and the equity release sector through the Retirement Cross-Industry Group which the BSA chairs twice a year.”
Notes to editors:
BSA press contact:
Press & Publications Officer
020 7520 5927
About the BSA: The Building Societies Association (BSA) is the trade body that represents all 44 UK building societies. Building societies have total assets of over £374 billion and, together with their subsidiaries, hold residential mortgages of over £292 billion, 22% of the total outstanding in the UK. They hold over £265 billion of retail deposits, accounting for 18% of all such deposits in the UK. Building societies account for 34% of all cash ISA balances. They employ approximately 40,000 full and part-time staff and operate through approximately 1,550 branches.