The irony of age discrimination
by Leon Diamond
09/05/2024
Like other ‘isms and all forms of discrimination, ageism has no place in our industry – whether it’s directed at employees or customers. While I strongly support the rights of a cautious and well-run business, ageism isn’t only unjust, but also illogical.
And yet, every now and then, the issue of ageism rears its ugly head. On the plus side, this is a useful opportunity to discuss the concerns surrounding age discrimination and its potential impact on our industry and society in general.
In March, one of the UK’s biggest mortgage lenders made headlines by dropping its lending criteria for certain products from 75 to 70 years old, having raised it from 50 to 80 years in 2016. Many in the industry expressed concern at this U-turn, with some voicing their hopes that other lenders wouldn’t follow suit. A mass regression to lower age ceilings could be damaging to both the mortgage industry and to the wellbeing of our society.
Ironically, this reversal happened the same week that the Financial Conduct Authority (FCA) launched its review into how financial firms treat vulnerable customers.
Nothing but a number
Age discrimination in the financial services industry ignores the fact that the number of people aged 65 years and over increased by nearly two million since 2011, according to the 2021 census.
The Centre for Ageing Better described their ‘State of Ageing 2023’ report as “the most detailed, varied and up-to-date report about ageing in England.” According to its figures, the number of people aged 65 to 79 will increase by 30% to more than 10 million in the next 40 years.
During the same period, the report predicts that the number of people aged 80 and over will more than double to upwards of six million. Right now, there are more than nine million over-70s in the UK, according to Office for National Statistics (ONS) data, and 25 million people over the age of 50.
In general, the population is healthier, and as a result, many are working longer. And Baby Boomers with solid pensions make good customers. Despite these positive signs, age discrimination persists.
Our November 2022 survey of 2,000 people found that only 4% of people over-50 believed they would be able to take out a new mortgage. If that wasn’t concerning enough, this dropped to 2% for those over-80.
Many people, whether they’re in their 50s or 80s, are very financially capable of servicing a mortgage. Alongside pensions, they may have other income bearing assets and investments. But all too often, lenders ignore this.
Our 2023 survey of over-50s found that 28% had gone back to work after retiring. Aside from the fact that many in their 70s and 80s have not retired or are returning to work, lenders should consider a range of incomes, beyond salary.
It is understandable that lenders and brokers alike can find the later life mortgage market complex at best and overwhelming at worst. It doesn’t have to be, however.
A simple combination of an affordability calculator with product matching technology can provide a selection of suitable mortgages to help specialist underwriters and business development managers decide on affordability. Moreover, the process demonstrates how a person’s age is mainly obsolete.