Master Later Life Lending - By Air

Planning for 2026: Business Model Optimisation, Wealth Integration & Client Outcomes

• Will Hale

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Our CEO Will Hale sits down with Paul Glynn, Managing Director of B2B Marketing & Distribution at more2life, and Alan Ritchie, CEO at Royal London Equity Release. They explore how to build 2026 ready business models, use wealth triggers to start better later life conversations, and tap into tactical support from lender and provider BDMs. 

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SPEAKER_00:

So, welcome everyone to the next in our series of comprehensive conversation podcasts. And I'm delighted to be joined today by Alan Ritchie, CEO of Royal London Equity Release, and Paul Glynn, MD of Distribution and Marketing at Mortal Life. So today with uh Alan and Paul, we're going to take a look at around the uh the wealth market and how property can play a bigger part in financial planning. And also maybe a little bit explore a little bit about the regulatory landscape and how that again is sort of supporting the consideration of housing wealth uh within broader uh financial advice. So uh we're gonna jump straight into it. So so Alan, I'm I'm gonna go to you first and um start off with a question around what market forces do you think will shape retirement planning in 2026 and and perhaps more sp specifically with an eye on the um later life lending market?

SPEAKER_01:

Yeah, thanks, Will. Um it's all about supply and demand, isn't it? Like that's what market forces are always all about. And I suppose when I'm thinking about property wealth and holistic advice, um on the demand side, we're going to increasingly see pension shortfalls, you know, meaning that people have to consider property, you know, um, as part of great advice, understanding what the property wealth situation is, and understanding if there's a uh tax-efficient way to access that money versus um you know using all the other assets in the right combination is is going to be key. Um we did a bit of research on this connected to the pensions and lifetime savings associations um retirement living standards, um, and there's some pretty stark figures in there. So um those who are retiring at 68, the difference between using property and not using property takes takes there there from being 22% of people achieving at least a moderate standard of standard of living up to 59%. So with property, 59%, without property, only 22% of the population will achieve more than a minimum or or less than minimum standard of living in their old age. Another one, those who can retire at 60 with a comfortable standard of living. So that's like the the top level for PLSA goes from 0.1% to 11% achieving comfortable. So it's not just uh, let's say, the the masses that equity lease our property wealth is relevant for, it's also those who perhaps have some assets and and can achieve a reasonable standard of living in their old age, but it takes them to the next level. Just quickly on other another thing, so demand's also of course affected by um customers who have mortgages and haven't fully paid them off, and they might be thinking about you know how how in a stage of my life where I don't have as much income coming in, how do I stay in my home? Um also by interest rates, of course, and what they're doing at the time. And they've been reasonably stable for a while, so hopefully that will help. In terms of supply side, there's regulation and making sure that regulation's not getting in the way, and um, those of us close to extra lease are excited actually about the the regulatory direction there and the move away from it being a last resort to a sort of commonly used expectation almost from the regulator about using property, wealth, and old age in the right situations. And finally, the biggest one, and perhaps why we're here today, is holistic advisor awareness and how do we help um build that into um day-to-day advice?

SPEAKER_00:

Alan, wow, you covered a lot of ground there. So uh I'm sure there's a lot of themes we're gonna sort of come back to uh later in the podcast. But but Paul, perhaps sort of turning to you and um taking that sort of backdrop that Alan painted, which I think we'd all agree with, how how do you think that translates specifically to the later life lending market? Because we've had a few challenging years probably in in in our um particularly the equity release sector, but for all the reasons Alan described, I think we're sort of moving into to maybe a much more positive landscape. So what what do you see 2026 shaping up like for our sector?

SPEAKER_02:

Yeah, I think I Alan's painted a really good picture of the supply and demand issues. I think there's some probably near-term issues that that come into sharp focus following the um certainly following the budget, because the narrative in the run-up to that budget was was certainly a a tax focus on um wealth, on um savings, on unused pension, all that all of that kind of um non kind of traditional um tax areas for for a government like we've got in in play at the moment. Um and a c and as a consequence of some of the things that have come out of that budget, it's it's way more complicated now for people to think about how they plan for their retirement and they they manage their decumulation and and and really how they put some of the you know the those near-term planning needs around how they're going to support future generations or or generations on you know current generations onto the property ladder amidst a backdrop where allowances are frozen, you know, nil rate bans are um are frozen, mean meaning you've got more people paying more tax and certainly more estates coming into the frame where they need to think about all that sort of stuff. So um I think in the near term, anybody who's looking at their accumulation stage will be thinking about ICER allowances, salary sacrifice impacts, all of that stuff that's been in the press over the last couple of weeks. Anyone who's at crystallization stage right now will be really thinking long and hard about the right product shapes that are for them, um, and how long they're going to need it to last, and what the impact is on the estate. And the moment you get into those last two pieces, property becomes really, really important. And I think it's quite an exciting time for our market where where you've got a backdrop of people really needing to think holistically about their planning, more than ever now, um, property and later life lending against those properties is beginning going to become a crucial part of the planning cycle and certainly will be a solution for many people.

SPEAKER_00:

Paul, that's really interesting. I think that concurs with with my view in that I think the direction of travel, not just from the budget, but over a number of years now, means that um people planning for retirement, and particularly in terms of um intergeneral intergenerational wealth transfer are facing a pretty complex situation. So, you know, our sort of call to action, I think, as there is that everybody over the age of 55, and particularly those who are homeowners, should be seeking advice around how to best navigate that that sort of next stage of their life. But but Alan, turning back to you, I mean, we've heard the phrase holistic advice a couple of times, and and this is the challenge, isn't it, that that the market faces and our sector faces, because again, you'll know the stats better than me sitting at Royal London, but but I believe there's probably only about 11% of the population who are getting um sort of what I would term holistic financial advice at the moment, looking across pensions, investments, property wealth. And yet our target market for later life lending, the people who really benefit from our products probably sit in that sort of middle England uh sort of category. So, how do we close that advice gap? You know, what's the role of targeted support, or how do you see business models in the intermediary space evolving to try and meet that customer need? And particularly with through the lens of the later life lending market, getting our modern lifetime mortgage products in the hands of the customers that really need them.

SPEAKER_01:

Yeah, so the world's evolving all the time, isn't it? You know, we've we've got AI which is making it possible to do things that were never possible before. Um and I fundamentally believe that'll help advisors reach more clients in a more um efficient and uh commercially sustainable way. Um there's there's lots to go on that road, you know, it's moving fast, but it's still early days, and you know, time will tell how how quickly that'll happen. Targeted support is another you know big shift that you mentioned, and um again it's early days, you know, it's not it's not legal yet, but it's coming very soon. And I think the first targeted support solutions will probably be in play about April time next year, so it's it's coming quick. Um initially I expect that will be on other propositions rather than equity release, but once once people are learning from that, you know, why would it not apply? Um, you know, it just enables that ability to to reach more people and help more people. I I do think there is an immediate rule for even that top 11% of the wealth population, though. And as some of the stats I said earlier, I think it's becoming increasingly common that they will need to access money from their home either through downsizing or through something like equity release. And you know, for all those reasons, um advis holistic advisors who don't do it themselves and aren't perhaps ready yet to do it themselves, they're gonna need um someone to refer to. So finding a reliable, um, you know, impressive uh advice business that specializes in equity release and uh and you know, if you're not gonna do it yourself, making sure that you've got your your processes in place to refer them for that part to to give the best possible advice, I think, is key. And I think there's a lot, you know, we did we did a survey recently with ballistic advisors and um probably about 50 advisors responded, and only two said they weren't interested in some sort of referral relationship. So it feels like we're on the cusp of of those being set up.

SPEAKER_00:

Well that that sort of is perhaps a good link into you, Paul, because uh that that seems to paint a great opportunity for advisors in this sector and particularly for AIRS members. So, you know, what what would your message be to advisors now? Because a lot a lot of what we've talked about is sort of forward looking, and as Alan said, some of these things are not sort of even in place sort of yet. But but what would your message be, Paul, to advisors as to what they can do now to really evolve their business models, but also sort of meet the requirements of consumer duty and make sure they're moving in line with the direction of travel of the regulator?

SPEAKER_02:

Yeah, I I I think I agree you know with with the points that Alan's made around you know harness technology, that they should be doing that anyway. But I think there's and then that will become something that that you know that reaps longer term benefits as things evolve. But in the here and now, I think the specialists have got a massively important role, um, either within firms themselves, um where they've got the qualification, it's been dormant, they haven't really put you know a lot of client traffic through those processes. But I think that you know the biggest opportunity is in that referral space as a partner of firms that have those customers that have that need, that need that support. So for our core market, it's a massive opportunity to invest a bit of time and effort in partnering with firms as you know B2B specialists in later life. Um, you know, that across the wider market, whether you're a wealth or you're a pension firm, that they've got to make the decision now to write or refer. Um referrals are an easy lift, it's a here and now, you know, it's a relatively simple uh process to put in place. Writing takes a bit more effort, but you know, I think some of these firms have already got those processes, so it's about how you you support clients through those journeys more effectively. Um but all of the firms should be looking to deepen their relationships of B2B partners because it is the only way to maximize the commercial opportunity that's a here and now one. And there is pressure building in the background from the regulator to say don't wait. It's not a it's not a problem that's emerging, it's a here and now issue for us all to tackle. Um, and it's a brilliant commercial opportunity whilst you're going to drive good customer outcomes and really make a difference to people and to your brand. So it should be at the core of everybody's planning strategy for the next two years.

SPEAKER_00:

So, Paul, let's sort of take that down to the next level. I mean, you and I have worked together for the best part of 20 years, I think, in various different guises. And um, I know sort of data and technology has always been a passion of yours. So, you know, what can advisors maybe both in the sort of wealth space but also in the mainstream mortgage space, what what can they do around sort of data and MI to really unlock some of these opportunities and and drive effective engagement with customers? I I suppose what I'm thinking about, are there triggers in the wealth space around you know, maybe drawdown reviews or at the point in time people can access their tax-free cash or in the mortgage market? Are there periods when customers coming to the end of an interest-only mortgage or the end of a fixed rate period where where's the right time to start talking to them about later life lending solutions? What are your thoughts on that and your your sort of tips for advisors in that space?

SPEAKER_02:

Well, let's tackle the the mortgage question first. I think you know the the interesting thing is that you know there's so much business emerging now in that interest-only space. So um I think that would be the first portal call for any you know any business where they've got a book of mortgage customers is to look at what your projected um you know maturities are gonna look like over the next couple of years. I think thinking through the more complex needs of those emerging customers, um, you know, the opportunity where customers are maybe starting to struggle making payments, um, identifying them to be able to look at some of those more modern products as solutions, and I think you know that that would be an immediate um you know area for people to look at. And then you know, there's wider areas to segment client banks and data, looking at anyone with large pension pots and large property values that are going to get triggered by some of the you know the conversations we've just had and the changes that have just been made. I think anyone who's looking at you know high ISA contributions they need a conversation now. Um, and then there's wider, wider conversations around intergenerational planning and and spotting you know opportunities there where you've got you know customers in their 60s, um, you know, they're in a different wealth position than customers that are in their mid-20s, mid-30s. So I think leveraging, if you've spent the time acquiring customers, I think taking the time to understand the way that you can leverage different data parts, mine the data in your CRM is going to be really, really important. Um, and then looking at reviews. So we've talked about mortgage you know, maturities, mortgage reviews are another opportunity where you've got customers who are on certain types of product where the more modern equity release lending products where they're making payments could be beneficial, and again, working with partners on starting to talk about the impact of property in the wider planning as customers here, as you said, their pension review uh dates or or their you know they're taking any kind of um money from pension, it's a should be a trigger for a conversation that says, is this the right thing to do? Is the strategy still correct, and what role could property play in that planning process going forward? Super, thanks, Paul.

SPEAKER_00:

Alan's sort of just taking some of those themes further. Again, Royal London is obviously sort of very very active in that sort of pensions and wealth specs. But what do you think we need to do to break down some of those silos that still exist between the different distribution uh uh parts of the market?

SPEAKER_01:

Yeah, so I think everything's moving in the right direction. So conversations are are becoming more comprehensive, uh to use your term. Um I I I feel like you know the the days of we're just gonna focus on broken one product in in most of those um situations are past us now. I think that's it's different where there's specialist equity release advisors and they're being um you know used to support clients who otherwise don't have a route to go to to get to that solution. Um but for the holistic advisors out there, I I I just think you know it's a it's a no-brainer now to include property in in conversations. And you know, holistic advisors always will have talked about property, of course they will, but it's becoming more and more um common and needed to consider actually accessing that wealth earlier to give um their clients the best outcomes and standard of living. And I think consumer duty has been a game changer in that sense as well, because you know, it's the overall outcome that counts, you know, and we're on the hook for that as providers. Advisors, of course, are on the hook for the advice that they give. And it's no longer enough to say, well, I'm only talking about about this bit in relation to your pensions or your protection needs. Um, you know, I need to I need to help you make sure you're not missing something big across the board. Where Royal London can particularly help is we have um our our BDMs who support advisors all the time with you know ideas for how to grow their business, add value to their business, um, make their life easier, more efficient. So that's something that we'll be seeking to do much more of, including property in the in the equation going into next year.

SPEAKER_00:

That that's fantastic to hear, Alan. And um sticking with you for a minute, you you um you mentioned the budget, and clearly we've seen some changes in the budget, the mansion tax as an example, but but but other areas as well. Uh I bit of a teaser alert, but but air is currently producing a white paper in association with Tony Wickenden, who's one of the sort of um sort of most uh uh sort of visible tax experts in the market, and and we're looking particularly at opportunities around intergenerational wealth transfer um using property wealth. So what are your thoughts around that part of the market and and how do you think um maybe sort of some of the announcements in the budget either sort of change the way advisors might approach that or maybe increase the urgency around looking at some of those things?

SPEAKER_01:

Yeah, I think the biggest thing is X ray release can be a tax-free way to get income. And in a in a world where, you know, again, in another budget, the tax thresholds are frozen, both for income tax and inheritance tax, more and more people are going to be um paying more and more tax, you know, if if they're not um expertly advised on on the best way to manage over over their assets. And it's not about tax avoidance, it's about paying the right amount of tax for you and your situation. So um, you know, it it's more and more of a a good option to be thinking, well, if I release money now from my home, either through downsizing or through equity or lease, then I can pass it on to the next generations and as long as I live another seven years, then they won't pay inheritance tax on that rather than the the current um you know ever increasing situation where if you sit on the the home until death, it suddenly um can come into that inheritance tax equation more and more for more and more people.

SPEAKER_00:

And and uh Alan, I mean, you know the government did a lot of flight caring before before the uh the budget and um things like a um you know a cap on lifetime gifting and things didn't make it into this budget but uh I suppose there's no guarantee that those things won't be ri revisited down the line so you know would would your message be to for advisors to sort of grasp the nettle now and make sure they're they're sort of helping customers with those some of those challenges sooner rather than later?

SPEAKER_01:

As long as it's right for the customer outcome I I think the the mistake would be not considering it. I think the big thing is to consider it and work out um without panicking in any way or without trying to preempt what may or may not happen. What is the best advice in that moment? And I think for the reasons you allude to um you know the the current environment one of the the best ways to pass on wealth if that's what you want to do is to gift it and make sure you think you're going to live another seven years. So you know that may or may not be closed in future things change all the time but in this moment it's certainly an interesting option.

SPEAKER_00:

Thank you thank you. And Paul coming coming to you a topic that Alan actually touched on in in in the answer to the first question is around the regulatory environment. So I'd like to sort of come back to that and you know we're still sort of um reflecting I think on the response of the industry to the um to to the FCA's discussion paper on the future of the mortgage market. What's your views on on that and and what do you see the the direction of travel being for the regulator in this space and how how should advisors be sort of embracing some of the themes that are coming out coming out of that piece of work?

SPEAKER_02:

Yeah I I think this is where anybody involved in this space now is it needs to be alert to some of the you know the the the conversations that are already in play so we we've already seen on a number of podiums now people from the regulator at a very senior level um you know say that we need to face into some of the complexities of of our market and you know the the growing customer need to continue you know utilising property wealth in in in later life. No one's talking about it being something that they'll deal with in the future. Everybody's talking about it being something that needs to be grasped now and it's something that you know the regulator can't do alone and and that you know we need to make sure it's a you know it's an urgent problem that we all tackle together. So so I think it's really encouraging that what is a discussion paper is now starting to stimulate those types of conversations.

SPEAKER_00:

Again set the scene for property wealth and advisors who are experts in this space to to really play a part in driving good customer outcomes in the future but the regulator's giving us all a really clear steer we can't ignore it whether we're a you know a a specialist in the later life lending space or we're giving advice in the you know the wider parts of the market we have to start signposting the property at the right time is an important part of people's you know long-term planning solutions and and you know we can't be siloed in any way uh whether that's across segments of the industry or segments of the mortgage market can't be siloed in any way in the way we tackle that and and Alan what's your take on that as I my my my reading of the um of the paper is very similar to Paul's and actually looking at the responses across the trade bodies and other some of the other organizations that shared their their thoughts that you know the regulator does point in the paper I think helpfully to you know maybe some of the opportunities for product innovation etc but but broadly I see this as mainly a distribution challenge. It's um you know we've got some great products in this sector at the moment maybe there's not enough awareness around amongst end customers or advisors about you know what's there already so so really for me it's a distribution challenge. But do you see that in the same way or or slightly differently?

SPEAKER_01:

Yeah I mean I think that that's probably the biggest next challenge right so when when the regulator always talked about it as last resort you know don't touch your property until you have to type thing um that was probably the biggest challenge now that that's no longer the case and and we're in a much better um place on that um I think the next big one is distribution and I suppose I speak as someone who's you know a background in pensions and protection and I'm I'm I'm recently um much closer to the equity release market and you know probably probably like I was at the start of this year and and others um I think there's lots of people out there who still think equity release is quite a risky product or quite a niche thing. And you know it's partly that that name from the past isn't it whereas now you know I I stood up at a distribution conference earlier in the year and I I just explained it in the way of you know you you get the money and there's a guarantee from us that you will never um find that your your sale of your property isn't enough to to cover the loan. Like we guarantee you'll never have to pay more back than what you you sell your property for. And there was some sort of light bulb moments in the room and I I just think that you know it's really basic to to for the both of you who've been in the industry for a long time on equity lease but for a a lot of um players in the market who are going to be key to that distribution it's probably just getting the message out there and and and helping start with the basics and then the reputation will naturally grow.

SPEAKER_00:

I I think those are wide words Alan I mean I remember when I first came into the industry probably sort of 12 years ago and you know probably came in with some of those um sort of preconceptions around um you know some of the uh the challenges around the products etc but but actually when you look at the products objectively they really deliver fantastic solutions for a very large cohort of customers and all of the features and benefits that have evolved significantly even in the time that I've been in the industry I think you know we we need to get that message out there and make sure the products are better understood and you know all of those myths and misconceptions are sort of consigned uh consigned to history so yeah big communication job for us all um so I'm gonna sort of finish the podcast by by by giving both of you an opportunity to sort of talk specifically about your plans for next year in your businesses so maybe start start with you Paul um so we've heard a lot about the the sort of backdrop that we're going into for 2026 but but where are sort of more to life's priorities for next year and and what can air members expect from you um as as we approach this exciting new period yeah we're certainly not going to rest on our laurels as we go into into next year with this as a an exciting backdrop will I think you can expect to see you know more more work from Mortallife on how we try and push the boundaries in in the the higher L T V space to support you know a growing cohort of customers with a need in that space um more innovation in terms of interest reward where you know where we can bring it to market um and add it to more of our plans because we do think that you know it's another lever for in the hands of a of a financial planner as a as a powerful tool to be able to make recommendations so committed payments and and different forms of reward will be will be part of our strategy.

SPEAKER_02:

We'll work with the core market to to help them embed some of those referral opportunities. So again you know Alan talks about BDM teams able to support ours will be doing exactly the same and in helping our existing equity release market build those bridges into the wider marketplaces and financial services to you know to to support customers moving across and then and I think overarching will support the wider market on the you know the outputs from the discussion paper and I think that that for me will be you know collectively the way we can best support air members and and raising awareness in the market where you know we we we all talk about you know the value that you know property can play in the in wider financial planning but also the expectation in terms of you know the regulator narrative in in driving good customer outcomes. So you know we'll be a a voice in in in making that a loud message across the market.

SPEAKER_00:

Thanks Paul and and and Alan on on your side Royal London did a lot of heavy lifting this year on the technology side with your portal and other bits and pieces so so with that hopefully largely behind you what what what's your focus for next year?

SPEAKER_01:

Yeah it feels like we came a long way this year actually so we you're between improving and and I think getting to a really good place the advisor experience and the quote and apply as as as I call it um journey we also expanded out our Royal London funded product um to to have you know meet more customer needs and and um certainly grow in scale um we've got four pillars to our strategy uh you know I'm I'm like a broken record on that internally as well as externally so we're looking to grow the market first and foremost um anything we can do you know if this helps brilliant I'm I'm glad we we did this podcast anything we can do that helps grow the market to really help meet more customer needs is is number one priority and of course at Royal London we want to be a big player in this market we think we can bring a lot to it you know with our mutuality and our our scale and our expertise so we're looking to make sure that we're always growing our share in the market and there'll be more and more innovation from us in that space to to help do that. Another really important one is standing out for customer outcomes. So again as a mutual we feel we can you know help help set the bar really really high on customer outcomes and you know as as I know you're both doing in your businesses um we're looking to find better and better ways to demonstrate that and and to keep that bar super high. And then finally um scalability. So you know the market at the moment is what two and a half billion or something a year and you know in the in in all the papers including the recent FDA review and and the other um research in the market we know it's going to be many times that at some point it's like a coil to bring ready to go and so it's really important that all the businesses like ours in the industry are ready for that growth when it comes and we can still provide excellent service and so there'll be a lot of behind the scenes investment to make sure that um we're making the most of AI we're making the most of automation and our processes are are ready for that scale.

SPEAKER_00:

Super well Alan and Paul thank you very much for your time today and on behalf of there and behalf of our members I'd just like to say thank you very much to Royal London and Mortalife for for all the support that you've extended across 2025. I think you've both painted a picture of a very exciting landscape as we move into 2026. So Alan hopefully that coiled spring that you talk about can uh can can be uh released and uh we can see that 2.5 billion um growing rapidly next year so uh thank you very much for your for your thoughts today may I wish you a very sort of um happy festive period and all the best of luck for for next year as well but uh that brings us to the end of the latest of our podcasts and our series of comprehensive conversations thank you for listening