Trump, tariffs, and the rise of later life lending

The return of Donald Trump to the political frontline might have felt inevitable, but the ripple effects from his tariffs and protectionist trade agenda are already making themselves felt.

Markets, as ever, dislike uncertainty, and as we appear to be at the start of a full-on trade war, with little understanding of what the short-, medium- and long-term implications could be, we can see that uncertainty reflected across global stock exchanges.

For UK investors – particularly those in or near retirement – there’s an uneasy sense of déjà vu. Investment performance, once again, feels vulnerable to the decisions of one man thousands of miles away, and anyone brave enough to look at their pension account(s) lately will not have found anything to write home about.

We haven’t seen this sort of volatility since the early days of the pandemic, and as I drafted this piece, the FTSE 100 was trading at the same levels it was a year ago, with plenty of scope it would seem for it to continue dropping.

That is scary, and for mortgage advisers with older clients, the implications of this kind of volatility can’t be ignored.

Retirement timelines that once felt secure are now up for review. Clients who believed their pension pots were adequate may now be facing shortfalls. Drawdown strategies designed around stable markets suddenly seem less robust.

And the conversation is therefore likely to increasingly turn to what else they can draw on – what other levers they might be able to pull to maintain their retirement plans?

That conversation has to include property. And while housing wealth still remains a largely untapped resource for many in later life, the circumstances are changing. Not only is there a growing financial need, but there is also a more evolved product landscape and – slowly, but surely – a shifting perception around the role of later life lending.

One of the key points advisers need to acknowledge is that even if they are not authorised to advise on later life lending products, they still have a responsibility to understand them.

Under the FCA’s Consumer Duty, advisers must consider the full range of options that might deliver good client outcomes. That includes the possibility of using equity in the home. It doesn’t mean giving advice on something you’re not regulated to advise on, but it does mean recognising when a client might benefit from these kinds of solutions and ensuring they are introduced to someone who can.

This was something Robert Sinclair raised in his article for our recent Spring 2025 Paradigm Mortgage Newsletter. He stressed the importance of advice being “totally on the hook” – and not just in terms of the final recommendation, but the whole process of identifying client needs and considering all available avenues.

It’s not enough to play safe within the product areas you’re comfortable with. You have to step back and think about what’s genuinely in your client’s best interest – even if that means referring them elsewhere.

At the same time, the later life lending product set itself has evolved significantly. We’ve seen the arrival of more flexible options that directly respond to long-standing concerns, both from clients and advisers.

Products such as Interest Reward, which allow clients to pay some or all of the interest on a lifetime mortgage, can dramatically reduce the overall cost of borrowing. These plans not only help slow or stop the interest roll-up, but in many cases unlock lower rates than traditional roll-up products.

That’s a significant development. It creates more choice for clients who have the income capacity to service interest – perhaps from part-time work, a pension, or other assets – but still want the security and flexibility that equity release can offer.

It also opens the door for more nuanced advice: looking not just at whether the client needs money now, but at how they might manage the product’s long-term impact.

The reality is that we’re entering a period of economic flux where clients will need more flexibility and more guidance, not less. Some will look to delay retirement. Others will cut spending, dip into savings, or consider downsizing.

But for many, the idea of accessing their housing wealth – either to support income or provide a financial buffer while markets recover – will be growing in appeal. And they’ll look to their adviser to raise the possibility.

This doesn’t mean every adviser should start offering later life lending advice. For some, it won’t be practical or commercially viable. But what’s essential is that advisers don’t shut the door on later life lending altogether.

They must build relationships with trusted referral partners, understand the broad contours of the product range, and be able to spot when it’s appropriate to bring those partners in.

It’s no longer acceptable to say, “It’s not my area.” If a client’s circumstances suggest that a lifetime mortgage or RIO might form part of the solution, it’s your responsibility to help them get the right advice – even if that means stepping aside and letting someone else take the lead. That’s what Consumer Duty demands, and frankly, it’s what clients deserve.

When pension pots are shrinking, investment markets are volatile, and clients are uncertain about the future, the value of joined-up, holistic advice becomes more important than ever. That includes asking tough questions, having open conversations, and knowing when to bring housing wealth into the picture.

Later life lending might not be mainstream, but for more of your clients, it’s becoming an essential part of the conversation. The question isn’t whether you should be advising on it. It’s whether you’re ready to recognise when they need it and whether you’ve got the right partner to help.