The FCA’s DP25/2 discussion paper for the first time raises the profile of ‘enhanced advice’ for cohorts such as older borrowers.

It makes mention of innovations like retirement interest-only (RIO) mortgages converting into lifetime mortgages and asks whether more holistic advice could support better customer outcomes.

In practice, we’re already seeing how this can work not just with regards to product innovation, but with a carefully planned mortgage repayment strategy tailored to clients changing needs, cross-market knowledge and timely referral to specialist later life mortgage advisors.

Let’s take a real client example to illustrate the point.

Case study: Divorcee seeking to stay in the family home

Our client in her late 50’s came to us following a divorce. She was keen to stay in her £670,000 property and had been managing a £336,000 Halifax mortgage solo for six months. On Halifax’s SVR, the mortgage cost her roughly £2,000 per month, not sustainable when she gets older and stops working.

Her employed income only gave her borrowing capacity of around £242,000. She is actively seeking a part-time role to increase her income to just over £50,000, which may open borrowing options with lenders like Livemore who stretch on affordability in later life.

Her asset position includes £86,000 in pensions/investments, albeit only £25,000 is accessible in sterling, with the rest overseas. A previous solution involving her son on the mortgage fell through due to his upcoming marriage.

Too often, advice ends with “yes, we can place the case.” But good advice, particularly in later life scenarios, asks “should we?”. In this case, we advised caution. Even if potential additional income lets her remortgage now, this could be kicking the can down the road.

When she retires at 75, equity release (ER) may be her only viable option and eligibility will depend on the loan-to-value (LTV) at that time.

We suggested a proactive plan: over the next 15 years, she should aim to repay £70,000 of the mortgage. This would bring the LTV low enough to allow a standard lifetime mortgage later, assuming current equity release lending parameters. The aim isn’t just affordability today, but sustainable long-term security.

This case shows the need for joined-up advice that spans both traditional and later life mortgage markets. DP25/2 proposes an ‘enhanced advice’ standard for older clients – but what does this mean in practice?

We think it means not stopping at the edge of one product category. Instead, understanding how today’s decisions affect eligibility for tomorrow’s solutions. It means helping clients build a roadmap, not just process a transaction.

We didn’t need a new product. We needed holistic advice.

DP25/2 proposes that all mortgage advisors may need a CeRER qualification to offer basic guidance in this space. I disagree.

There is a better path: empower standard mortgage brokers to raise awareness of later life lending options and incentivise confident referrals to specialist advisors.

These referrals, when structured with fair commission-sharing, improve outcomes for clients and income for brokers – without forcing all brokers to dabble into the regulatory complexity of equity release.

Malcolm Davidson is managing director of UK Moneyman