The Financial Conduct Authority (FCA) has launched a market study of later life lending to see if the sector can be improved.

The regulator said: “We are launching this market study to examine whether change is needed to enable the lifetime and retirement interest only (RIO) mortgage sector to meet consumers’ changing needs, driven by effective competition in the market.”

The FCA will be focusing on the providers and distributors of lifetime and RIO mortgages, including advice.

The regulator will also question whether new later-life lending products could be developed to meet consumer needs.

Sourcing system providers are not immune to the FCA’s focus, nor those who fund providers, which the regulator says “may influence the design, distribution and value of these mortgages”.

The reason the FCA is focusing on later-life lending is that a growing number of the public face financial difficulties in retirement if they rely only on pension income.

“For homeowners unable to address any shortfall in pension provision, access to their housing equity may enable them to achieve the living standards they seek in retirement,” the FCA said.

“If housing wealth begins to play a larger role in meeting these needs than it does now, we want to ensure this is done efficiently, in a way that delivers good outcomes for consumers and benefits the wider economy.”

The regulator is taking comments on the issue until 17 April and will publish an update by the end of the year.