Advisers often don’t consider the full consumer journey, FCA warns

Later life lending has the potential to become the fourth pillar in retirement, but the market is not yet ready to deliver, the FCA warns.

Emad Aladhal, director of retail banking at the FCA, says in the years ahead "housing wealth will become an increasing part of how many people provide for their retirement", but warned that it currently "continues to be seen as an option of last resort, if thought about at all".

Fairer Finance research suggests that by 2040, 51% of households aged 60 and over could benefit from accessing their housing wealth in retirement through later life lending. 

However, of the almost 330,000 mortgages advanced to over-55s in 2025, only 9% were lifetime mortgages or retirement interest-only products. 

When discussing reasons behind low consumer take-up, Aladhal said: "Too often, consumers engage only when they are under financial pressures, when they feel their options are limited. And advice is often not considering those options for retirees.

"But that is not how this market should be seen. Later life lending needs to be something consumers consider early, openly, and with confidence as part of their long-term planning."

Aladhal added that many consumers are unaware of later life lending as an option and asked what the market is doing to engage consumers early in their financial planning, stating that "if the underlying need is clear but take-up is still limited, we have to ask where the journey is breaking down".

Instead, he says, "the market is in silos – set up for mortgages, pensions, investments and later life planning to play in different parts of the pitch". 

"Advisers often don’t consider the full journey. Or most importantly, work together to achieve a holistic good outcome for the consumer", Aladhal believes.

Concluding, Aladhal said: "We want to see advice that supports informed, confident decision-making across all available options. That means advisers looking across the whole consumer journey, not just part of the market. It means moving from product-led conversations to genuinely holistic ones.

"We have seen some progress. Referral models are one example, and they matter. But they should be a starting point, not the end game.

"The challenge now is to be bolder. More ambitious. To think differently about how advice is structured, how expertise is shared, and how consumers are supported to reach better outcomes."