Longer Lives, Better Advice, Stronger Growth

 This practical session explores how increasing longevity is reshaping later life planning and what this means for advisers looking to support evolving client needs. Hosted by Lyndsey Charnock, with adviser perspectives from Paul Saroya (Viva Retirement), Steve Paterson (Later Life Money) and Ian McKinnon (Financial Clarity), the discussion brings together insight from Canada Life’s Life100+ research with real-world views on lead generation, client challenges, market opportunities and common misconceptions, before introducing Advantage, Canada Life’s new lifetime mortgage product designed to help clients access a lower rate through committed monthly interest payments.  

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Transcript

Why Longevity Changes Everything

SPEAKER_03 0:09

We're going to be discussing two areas today. We're going to be having a look at Canada Live's Live 100 research, which is highlighting how increasing longevity is reshaping later life planning and evolving client conversations and client needs. And we're going to discuss how that operates on a day-to-day business and a day-to-day basis in advisor businesses. We're also going to take this opportunity to introduce to you our new interest-served product, which is Advantage. And we just wanted to speak a little bit around interest-served equity release products and how they play a great part in the retirement income planning journey. So with later lives and people living longer, we are seeing people potentially working longer and having the ability to service interest no longer in retirement as well. So there's lots more in-depth conversations to be had and hopefully lots more business roles for you as advisors as well. So some of you may have seen some of the research that we've done. So we started the research back in 2024, it was.

Why Clients Focus On Now

SPEAKER_03 4:51

Yeah, definitely. And I think from the research as well, we found that people very much think about the here and now. They might look at the next stage in the life, but not necessarily any further than that. Is that kind of what you you see from client conversations when you're thinking about different age groups?

SPEAKER_01 5:09

Yeah, I think for a lot of clients, there's an immediate need that brings them to the table when you consider uh equity release. And I reiterate what it's funny, Steve mentioned age 50. 50 became a milestone for me. I always remember feeling really different when I turned 50. I had more of my career certainly behind me than ahead of me. Um but I think we also need to keep in mind that the average first-time buyer in the UK is 34, you know, so they've probably taken 15 years of their career to get on the property ladder, and 15 years later we're gonna plan with them for later life. Um but I think planning is always good when it's done early. Um and I think a lack of a plan can do a lot of damage, and I think in this area and this world of consumer duty, the way you know sometimes what we don't do can cause uh some harm as well. So I think the earlier we bring those discussions to the table, the better.

SPEAKER_03 6:17

Yeah, got that full understanding. Same for yourself, Paul.

SPEAKER_00 6:22

Yeah, I fully agree um with with what both of you have said. The the earlier, the better, absolutely. That stops the firefighting. Um, but it means that clients can really have a a view on how they want their future to be and actually have a say in it. So very often they forget that the their property, their main residence, is probably one of their biggest assets, if not the biggest. So it's really nice to be able to say what wherever they are on that you, that they should be thinking about their property as part of that planning as well, whether it's downsizing or releasing funds.

SPEAKER_03 6:54

Yeah, yeah,

Research Findings That Shift Advice

SPEAKER_03 6:55

definitely. And it spoke clients having that understanding. 78% of people also felt that the workplaces should provide a retirement consultation. So again, maybe something for us to all to consider. Um, so just going through the report, just to highlight some of the other findings that we found. So it looked we we looked to uh there was only 10% of under 55s that expect to fully retire. So again, that's just people not having the right provisions in place, um, you know, not understanding and being prepared enough, as we've just said. The other kind of findings was around um how people wanted career breaks, sabbaticals, and flexible working, a reshaping retirement. And people's thoughts around that was that they needed more time out to recharge and focus on the mental health and the well-being as well. There was also growing demand for annual reviews, which is really important, obviously, with people living longer to make sure that people's plans are on track, as that we are reducing that longevity risk as well. And then the other one was around what motivates people to work longer, and that seems to be driven by people's need to stay healthy and to stay fulfilled as well if they are going to be spending the next you know 20, 30 years plus in retirement, making sure that they're happy and fulfilled with that.

The New Shape Of Retirement

SPEAKER_03 8:16

And with conversations that you're having with clients, how do they feel about living longer? Do they understand kind of the potential as to how long that retirement journey could look? Or were they, as we said, very much planning for the here and now?

SPEAKER_04 8:30

No, that's a really good question. I think people are more aware now that people are starting to live longer. And it's not at one time, I guess our area of advice would be a one-stop shop almost. However, now people are living a lot longer. It's not a case of them working out when they retire, and this is another pot of wealth that can be used and assessed, if you like, or accessed, but it's how long they're going to live for. So it's not a case of just thinking I'm going to retire at that point and it's a fixed income. People are living 25, 30 years beyond retirement. And on the other side of that, I even see people now in the 70s who are currently working and they're still working, running their own businesses. So my experience is the the the people I've met over the last two, three, four years, this has become more mainstream, and they are looking at it as looking at the retirement journey. We're living a lot longer, and it could even go into care needs in the home and stuff like that. So it's a big topic of conversation now.

SPEAKER_03 9:33

Yeah, definitely.

SPEAKER_01 9:36

Yeah, thanks, Steve. And I think um just to pick up on and follow on from what Steve said, um we've noticed a real trend in some of the inquiries that we are getting today from clients who did have a almost a one and done approach. You know, they've had uh lump sum uh lifetime mortgage from eight, ten years ago, um, they believed that that would see them through the remainder of their life, and uh lo and behold, uh there I mean this will be borne out by the lenders as well, that there's a lot of contact from clients looking for additional borrowings. And I think that as we look forward and we have that greater acceptance that retirement's a longer uh journey and that life is longer, I think undoubtedly that's reshaping how we give advice, how we design product for this market and so on.

SPEAKER_03 10:39

Yeah. Yeah,

Why Product Flexibility Matters

SPEAKER_03 10:41

definitely. And I think that kind of leads on to the next question around that. Because if people are living this long now in retirement, how important is it for the the flexibility of features within products, really? What do you think from your point of view, Paul, in terms of you know doing that research with clients about the flexible features?

SPEAKER_00 11:01

Yeah, it's really critical. No one client situation is the same anymore. So we can't apply a one-size fits all. So I think the the last few years we've seen some really good innovations, some really good nuances on different products. We've got lots of solutions, but we need that innovation to carry on pushing forward, breaking barriers so we could offer more solutions for more people in those situations.

SPEAKER_03 11:26

And that kind of leads us on into um our interest-served proposition

Introducing Advantage And Early Trends

SPEAKER_03 11:32

as well. So I'm sure the majority of you have probably seen that we we launched a product called Advantage only two and a half months ago, I think it was. Um so just to kind of give you an overview of the types of people that we've seen using the Advantage product so far. So we saw that the age range was a lot younger. So we're only comparing it to our other product, which is Capital Select, would usually see a client age range of about 69.70, with the interest served product that's reduced to 60-61. So quite a bit of an age difference there. Also, the people that are servicing interest, so I'll I'll kind of go through the features of the product, but clients have got different options as to how much interest they want to service. 88% of applications that have come in through are servicing 100% of the interest. So people are in that position, you know, where they can service the full interest as well, which is good to see. And regarding client conversations with interest served, how have you approached

Making Interest Payments Make Sense

SPEAKER_03 12:31

that? How have clients fed back in terms of servicing that interest?

SPEAKER_04 12:36

Yeah, and then another good question. But I've certainly seen a big shift over the past three years where clients are wishing to serve as some or all of the interest. Um and it's probably about positioning the benefits of doing that. That's the main thing. At one time, you would often have clients or the brokers who would introduce them saying, This client wants to take the max out, they've got no family, etc. So they're not they're not worried about the end equity. But when you when you break it down, explain they could get trapped, you know, in certain circumstances where they can't move or it's going to grow to a certain level. And then by paying the interest, it leaves them more options later on where they can borrow more money and they can come back, and it keeps that balance static if that's what they wish, or even if they're only paying part of the interest, it's got a huge reduction in the interest buildup over the years. So once it's just if it's positioned properly and the affordability's there, I'm certainly finding that people are happy to contribute towards all or some of the interest now we are.

SPEAKER_02 13:39

Really technically.

SPEAKER_01 13:42

Yeah, I think um if we go back maybe six, seven years ago, um, that we were in an environment where there were rates at 3%. And uh I think if my memory serves me well, I had a rate started with two back in the day. Yeah, um certainly high twos, but uh back then we clients had this opportunity to borrow, not considered paying interest, and you know, we were looking at an environment where debt would double in 24 years, you know. We're now looking at debt doubling in nine years, potentially or eight years in some situations, and I think that clients have moved from a standpoint of being reluctant to service interest to most definitely being very willing to service interest. And the I think the positive there is that there's greater engagement with the family. The the clients' children want to be actively involved specifically in that area, uh, and often uh they might be contributing in the background. Uh so I think that overall it's supporting a better outcome.

SPEAKER_03 14:58

Yeah, yeah. Anything to add that?

SPEAKER_00 15:01

Um, yeah, just that uh these type of products, as you say, they brought down the average age. So people who would never even dream of becoming a a lifetime mortgage owner are suddenly looking at these plans um because they're used to paying a mortgage, so they're quite happy to carry that on. So we should always look at all alternatives, but where Rios don't fit, and we know they don't fit very often, uh, this is a really good, viable way to get younger people into our market. Um, people are much more savvy, um, so they what they're worried about what's going to be left later. Um, but what clients really like is that if they are, if they do miss payments in later life, it doesn't have an adverse effect really to them. Um, but secondly, I really like the way that the lenders, including yourselves, are um, you know, really promoting financial good practice for clients in making those payments and giving interest reductions.

SPEAKER_03 15:58

Yeah, definitely. And as we said, it is giving clients more opportunities. And I think you you touched on Steve, it's kind of giving them the best of both worlds as well. It's giving them the money now when they actually need it, but it's also giving them the flexibility to service and if they need to come back at some point in the future, you know, longer lives, 20, 30 years time, then they need that opportunity again in the future. It's giving them the flexibility to do that as well.

Advantage Features And Underwriting

SPEAKER_03 16:26

So with the advantage product, we're actually offering clients um a discount um for the amount of um interest that they commit to. So they've kind of got four different servicing levels. So they can service 25, 50, 75, or 100% of the interest. And as I said earlier, at the moment we are seeing that 88% of people have chosen to service the full 100%. The different um options within the product are um the more that you service and the more LTV you take, the higher the discount that is applied. We've also got different options. Um, within the product, we've got different features. So the client's committed to paying the monthly direct debit of interest, but if they do decide in the future that they don't want to pay that anymore for whatever reason that may be, as and when the circumstances change, that's fine. They would lose the discount, but they've still got the option to make 10% overpayments per year as well. So again, they can flex it as and when to suit. Um the other features within the product. So we have um the repayment waivers, so we've got the three-year repayment waiver. So if you've got joint borrowers, one passes away or goes into long-term care, the surviving person's got three years to decide whether they want to pay back that loan. And if they do, within that three-year period, there's no early repayment charge. Also with downsize protection, so with our other product capital select, you'll be used to downsize protection of five years. We've reduced it with this product to three years. So if after three years the client decides to sell the property for whatever reason that may be, then there's no early repayment charge there either. And then also just regarding underwriting with the new advantage product. So we've tried to keep it as simple as possible. So we've kept the underwriting criteria exactly the same as what it is with our capital select product. Um we've also got one of our senior underwriters here today that will be on a panel discussion this afternoon, and the key account managers are available on the round tables as well if anyone's got any particular criteria to discuss. So there's lots of different features available with the products, and as we've said, clients have got lots more options to choose from now. How do you

Best Practice Advice And Family Involvement

SPEAKER_03 18:44

kind of plan that into your process? How do you think um is best practice when you're going through an actual process with clients of all the different options and the different servicing levels that they can have?

SPEAKER_04 18:56

Yeah, I mean, that's it's a big part of the advice journey, and I think a lot of it comes with confidence and when you're in front of people. I think a phrase Paul mentioned earlier, one size doesn't fit all. So each of the clients is different, and I guess you've got to take a different approach to each of the clients to work out what's going to work for them. And a term I heard of someone else, or pinched this off someone else, was appropriate challenge. Yeah. So if a client's saying, I don't want to pay the interest, I'm not interested, it's about really being confident enough to ask why without putting them off or seem too challenging. So that's that appropriate challenge. I think if you can see there's enough that there's affordability there to make some payments towards the interest, either some or all of it, and the client is still, you know, they still say, Look, I'm not interested. You know, why is that? And then dig in a bit deeper, then definitely.

SPEAKER_03 19:53

So that's and these that conversations that's come up with family as well, where family are in the position to maybe service, especially if the loan is maybe to help them.

SPEAKER_04 20:03

Yeah, I think you know, they we always try as everybody does, I think, or the majority of people in this, you know, this industry that will try and get the family involved from day one as well. Um, a lot of the family they do they want to protect their futures, and rightly so, you know, so they've got affordability to pay towards the actual interest in that as well. You'll often find that a lot of them are prepared to do it. And as you mentioned, if they're getting a gift for maybe to get on the property ladder or it's to help them out of a specific situation, then the the family they are have from my experience, and you know, to be frank, a lot of them don't pay towards it, but they do want to know about the interest and how it works, and you'll often find with the family involvement, and when they've heard the benefits of it, the parents or the person taking out the the equity release loan will be more inclined then to pay towards the interest because the you know family's important, yeah.

SPEAKER_03 21:03

Yeah, definitely. Thanks, Steve. Let's wrap it.

SPEAKER_01 21:07

Um yeah, I go along with a lot of what Steve said, um, and I guess that's a common theme across the panel here. Um, we're all seeing the same trends um in terms of longevity, in terms of the discussion and the planning that we have with clients. Um, you know, there's a common phrase that most of us all know in the wealth uh arena where they talk about cash flow modelling. And most definitely uh we should be uh, you know, I've witnessed myself literally in front of a client with a sheet of paper just mapping out what the next 10 25 years look like, and uh, you know, discussing, you know, we need to remember also that some of our clients who are You know, late 60s, 70, some of them still have parents in their 90s, and some of them will inherit this, you know, inheritance has to come to the fore as well and be a part of that overall um modelling, I guess. So I think importantly, we need to, you know, use all the different things that's been said here, like one size doesn't fit all, but it's a real measured approach and it's a a personalised approach to that case. I think that's the the way where we need to move forward uh to keep some confidence in the sector.

SPEAKER_03 22:35

Yeah, yeah, definitely. And I'll I'll touch on cash flow modelling as well. We'll we'll come back to that question.

SPEAKER_00 22:41

Um yeah, so again, agree very much. So it's about not being an order taker, making sure that with our clients we're talking about those difficult conversations. If if there's a couple, you know, what's going to happen in reality when one of them isn't there, how important is downsizing protection? Um, are they likely to maybe move very often? They're in the house that they've been in for 30, 40 years. They don't want to quite move yet, but they probably will later. So, how important is downsize protection? So, yeah, absolutely. It's that appropriate challenge.

SPEAKER_03 23:17

Yeah, definitely. And I know obviously in the past we have always talked about about rate-driven products, but I think very much in this day and age, features are a big part of that, and it isn't just you know rate-driven anymore. We have to think about how and when client circumstances will change throughout this retirement journey and how the products can adapt and evolve with them changes, I suppose. And as you were touching, Anne, in regarding you know, that cash flow modelling and with longer life brings obviously more variation and advisors looking at various different assets to suit that retirement income planning through throughout the life of the client. When you're having conversations with introducers, how

Working Well With Professional Introducers

SPEAKER_03 24:02

open are they to kind of later life planning and equity release being part of that retirement income journey?

SPEAKER_01 24:14

So we had an interesting discussion earlier about introducers in the the earlier session that we all sat in on, and uh I think we need to choose and introduce us carefully. Uh and I think that we need to work at it, not just sit back and expect that there's a referral coming our way. And I'm a strong believer in collaboration, and I'm a strong believer that uh we should choose carefully, work with introducers consistently, and trust that you know this this neutral client is going to be looked after. Uh so I think it's really important.

SPEAKER_02 24:59

Yeah.

SPEAKER_00 25:01

Um yeah, I think introducers they have the same worries that our clients do about lifetime mortgages, about later life, about equity release. So they they very much are of that mindset. So it's really important the collaboration and the education. So it's kind of understanding where your introducer is at that point in terms of later life lending, helping to educate them so that they could see the benefits to their clients. And that's when you get that referral, your job's half done because that's a trusted person that they're passing across to you.

SPEAKER_03 25:34

Yeah, definitely. I think it is still that um lack of education, as you say, by advisors and by clients in just coming over them misconceptions. You know, the market's evolved massively, especially over the kind of last six, seven years, and the products are probably unrecognisable now to what some advisors have seen them in the past. So I think again, it's just always that constant re-education in it. And then just a final question on them on what marks out top later life advisors.

Habits Of Top Later Life Advisers

SPEAKER_03 26:06

So any tips from you guys in terms of what you feel marks out a top later life advisor?

SPEAKER_04 26:13

Um, I guess it's to cover off what there's some of the things that were discussed in the earlier sessions this morning and that as well. It's sort of cliche and all, but that questioning funnel. So it's starting off making sure that you, you know, you've got your open questions, your probing questions, and your closed questions as well. And also knowing your customer. So if you need to take it slower, or you know, things need to be explained several times. So it's that having that tool bag. And again, the appropriate challenge. Don't be frightened to challenge somebody on something that you think probably isn't going to work out well for them in the long run. And um one of the one of the things that I've seen or heard, everybody likes to talk. You know, everybody likes to talk about themselves and that. And it's practice those listening skills. So, you know, don't just have the question and toolkit, but be able to listen and listen actively so you can pick up on things that way. So that's that's for me. I think the outcomes is more important than process itself, but you still need, you know, you still need your database, you still need your fact finds and everything, but definitely questioned questioning and listening skills for me.

SPEAKER_03 27:29

Yeah, and adapting to suit that.

SPEAKER_04 27:32

Absolutely, and adapting for the client, yeah.

SPEAKER_03 27:34

Yeah.

SPEAKER_01 27:36

Yeah, I think we need to have a real measured and empathetic approach because all clients are different. And certainly in my experience, I know that there are clients who will nod their head because they think that's what you expect. Um they think that you stand between them and money at times, and I think it's really important to one key area I think is to test understanding. Yeah. Um and you know, there's an old phrase in life about the the you know, the pub quiz. Um, but I think we do need to really test understanding and just guard against any the any dangerous misconception.

SPEAKER_03 28:22

Yeah. I think it depends on that actual need for the loan as well, doesn't it? You know, whether it's a needs-driven client, whether it's an aspirational client, and you know, how desperate they are in some cases to check the vulnerabilities that way as well, which is really important. Yeah. Anything to add up?

SPEAKER_00 28:39

Yeah, fully agree um with the fellow panelists. Um active listening is so important along with empathy. So um there's a well-known saying that says uh feek uh seek first, even to understand and then to be understood. So if you think about first meeting with a client, you have so much to tell them, so much to tell them, but actually it's all in the listening. What's important is what they're telling you. So if you can do that, if you can challenge well and if you can keep in contact with them throughout their lifetime, then for me that makes a really good advisor.

SPEAKER_03 29:12

Yeah. And I think it's seeking that understanding from from all aspects as well. You know, we're speaking to our introducers regarding later life planning, but also understanding their business as well and where we can fit into it. No, we were speaking yesterday regarding the changes that are coming in place next year with IHT and how much, you know, that's difference that's going to have on a lot of clients' lives. You know, people that probably don't consider themselves wealthy but might have an IHT um liability going forward into next year. So, you know, just helping us to help other advisors as well understand that full circle, especially now clients are living longer. You know, we've all got our own part to play as to what that retirement journey looks like and give the best outcome for the client as well. Was there any questions from anyone in the audience either regarding later life planning or longer lives, longevity, or anything on interest serve products?

Tools To Explain Longevity Scenarios

SPEAKER_02 30:13

Hi, I just wanted on a question on longevity. We asked lenders to provide tools to help us in different scenarios. So I wondered how the panel what tools they use if you're looking at longevity and later life lending and different eventualities like care, how you visually show that to a client, what tools do you use?

SPEAKER_04 30:38

That's a good question. Um we've got things like the ONS that'll give you the statistics, but it doesn't tell you the full picture, really. So I've I've not really used visual aids as such, as you've mentioned. However, I think what as us as advisors have to bear in mind, the average the average age um that people live to is often skewed because people die very young as well, and all that's built into your ONS figures. So what we're seeing now, and it's something we mentioned earlier, people are living into the 80s, 90s, and mid-90s, still living in their own homes. So if we take an average, even if different areas have different, you know, different uh lifespans as well, I guess, on average, then it's maybe not giving us a full picture. But the only figures I would use is the stuff are being provided from the actual lenders and the ONS stats that you can get off the government sites. Yeah.

SPEAKER_00 31:40

Um yeah, um, so I think it's really good to know your facts. So you're right, there isn't too much out there, but you should know how much care can cost in a certain area for clients. Certainly on air, um, using the the um tools where you can make payments shows graphically how you can make a real difference to someone's inheritance later on. So I'll definitely be using that.

SPEAKER_03 32:05

Lovely, thank you. Um I think we've just got one minute anymore for any more. No, that's lovely.

Final Takeaways And Thanks

SPEAKER_03 32:14

Well, thank you very much. Hopefully, that's give everyone a little bit more insight into longer lives and interests of products. And thank you guys for all joining us today. Thank you.

SPEAKER_04 32:23

Thank you. Thank you.