Rising longevity across the UK population is a well-established trend and understanding how longevity translates into changing consumer needs is more important than ever.

The UK’s changing demographics tell part of the story – currently around half of the UK population is over 50 and one in four are over 65.

To put it in context, there are more cats and dogs – 21.4 million according to the PDSA’s latest report – than under-18s in the UK. The latest ONS data shows 12.7 million under-18s in the UK.

It is not just the UK where demographics are changing – across Europe there are more over-65s than under-15s.

But the numbers alone don’t paint the full picture in terms of understanding the full extent of consumer behavioural shifts.

How later life lending customers are changing

As retirement has changed, the way people approach retirement also continues to evolve. People now seek to maximise every asset throughout later life. This includes property wealth which has become an increasingly normalised consideration for those examining their retirement income from all angles.

Doing so presents options such as downsizing and, where appropriate, equity release as a way to access the wealth tied up in a homeowner’s property.

Advisers may also be aware that the average age of first-time buyers has risen to 36 years old according to the ONS with one in five aged 40 and over. Meanwhile, one in four 55- to 64-year-olds still carry mortgage debt and there remains a significant population of people who find themselves renting into retirement.

Advisers are very often the first port of call for customers planning for later life and the advice they deliver is designed to support them throughout retirement, which often lasts multiple decades. For advisers to meet this challenge, multiple conversations at different stages of later life are crucial to supporting their client’s retirement goals.

Air and L&G have both long believed the mantra that the road to success starts with comprehensive conversations between a customer and their adviser so that all options for financing later life are considered. Analysis from The Big Window, which has worked with the FCA on understanding how the needs and wants of over-50s customers evolve with age , shows that customers tend to make their best financial decisions in their mid-50s.

The study illustrated that customers in that age group are preparing for retirement, and begin to consider what it would be like to stop working. Once retired, this group tends to spend their retirement income on holidays abroad and home renovations. As they reach their 70s, they may want an active retirement but stay closer to home.

On the other hand, longevity is inevitably impacting on those stages of retirement and this has a knock-on effect on retirement planning. Both the approach to and experience of retirement is changing. People are working longer, whether it is full-time or part-time, and taking a phased approach to retirement. Meanwhile, many retirees are still active into their 80s, bucking the trend and expectation of more passive spending at this stage of retirement.

What remains the same however is that consumers in that age tend to want less complexity and more familiarity in the products and solutions they need.

This poses a potential challenge for the later life lending market and advisers alike as customers are not necessarily familiar with the products which can seem complex to them. This requires advisers to place themselves in their clients’ shoes and proactively think about how best to address their wants and needs, taking into consideration individual circumstances at different stages of later life.

Applying the three Cs

A good way to approach this is to remember the three Cs of confidence, connection, and contribution.

Older customers need to feel confident and have a sense of control. They want to positively reframe life as they get older and be recognised as such by advisers. Underneath that confidence will be a need for connection and support.

Despite their confidence many will still feel anxiety around financial decisions and may be concerned about been dismissed as a “silly old person”. They also want to be seen to be making a contribution and to be valued for doing so.

Applying the three Cs and keeping them in mind can help advisers address the concerns of older customers and build relationships which will help deliver good customer outcomes.

Key to all of this is that customers receive support in understanding all the products and solutions available to them and they should be presented with all options that best suit their individual circumstances. Advisers have to consider how the planning approach and product solutions they recommend address changing customer needs.

Longevity along with artificial intelligence and climate change is seen as one of the three mega trends shaping society and businesses. It should be a major opportunity for the later life lending market but in order to deliver on the potential advisers need to not only understand changing consumer behaviour but translate that understanding into business strategy.

Rising longevity means it will be a long-term opportunity so advisers need to act now to ensure good outcomes for their customers and to realise the commercial potential that can be unlocked by focussing on this sector.

Will Hale is chief executive of Air and Nick Birdseye is strategic partner development director, retirement lending at L&G