Lifetime mortgages have been regulated by the FCA since 2004. Those rules provide robust consumer protections, including requiring lenders to engage and provide tailored support to all their customers.
One of my constituents, a 96-year-old man, took out in 1990 what he thought was a £15,000 loan, but what was actually an interest roll-up lifetime mortgage. Despite paying £40,000 over the years, he now owes over £52,000 due to compound interest. He has been denied redress by the financial ombudsman due to time limits, and my team has also contacted the FCA and the lender without success. My constituent is now left to deal with the consequences. Will the Minister meet me to discuss this case, and how we can better support other people who have been mis-sold those products?
I am really sorry to hear about the circumstances that my hon. Friend’s constituent is facing, and I would be happy to meet her to discuss the issue further. Lifetime mortgages are complex financial products, and I suggest that anyone considering equity release seeks independent financial advice to help ensure those products are suitable for their needs.
An increasing number of pensioners are reaching the end of their mortgages with outstanding borrowing and finding themselves unable to meet later-life lending criteria, and this is likely to become even more prevalent in years to come as house price rises continue to outstrip earnings. What discussions is the Minister having with lenders and the mortgage industry about expanding those criteria and giving hard-working pensioners who might otherwise be forced to seek council support the opportunity to remain in their own homes?
I thank the hon. Gentleman for raising this important issue. I discuss mortgages with lenders and, indeed, with the Financial Conduct Authority on a weekly basis, and I will ensure that I pass on his comments.