Long gone are the days when people shed themselves of debt on entering retirement. Many silver borrowers are shackled with unsecured debt, and large numbers are raising equity on their homes to repay this debt, thus releasing their disposable income to enjoy.
Ironically releasing equity raises their debt levels, transferring unsecured lending to secured, longer-term borrowing, with lifetime mortgages. The only difference is the new debt is rolled up and requires no payments.
Indeed, that is where the consideration and discussion should segway towards. Is the client fully aware of the implication of moving debt in this way, essentially they are consolidating their debts into a much more affordable solution? Some lenders will categorise this borrower as vulnerable deserving more attention.
Ultimately, debt counselling might be advised. You’ll not be authorised for this; it is a regulated activity now, thank goodness, so you’ll need a conduit to refer any clients if you feel the need. Care with this, as some charge hefty fees.
StepChange joined the Equity Release Council in 2019; they are a splendid not-for-profit organisation that helps people in these exposed situations.