Britain’s pensioners are racking up ever-growing levels of debts as higher house prices mean families take longer to get on the property ladder, and people have to borrow more to cover care costs or help their children financially.
The mortgage debts of over-65s are set to double over the next 13 years from £20.1bn to £39.9bn by 2030, the Financial Conduct Authority believes.
Over the slightly longer time period from 2016 to 2036, the housing wealth of over-55s is set to grow from £1.5 trillion to £2.9 trillion.
The FCA’s report on aging populations also cited research that predicts 1.42m mortgage holders aged between 35 and 64 will not have paid off their home loans before they retire.
As a result the regulator said it and the banks it monitors needed to adapt to ensure they had suitable products for older borrowers, and are able to treat them fairly.
Borrowers also need to be aware of the potential strains ahead, the FCA said.
As incomes tend to fall into retirement, those in debt may struggle to service their loans and so need to sell their homes or carry on working past the state retirement age.
Banks also need to prepare by reviewing policies on upper age limits for loans, as well as making such information clearer, the FCA said.
Companies should also have clear plans in place to best serve older customers who are suffering from cognitive or physical decline, the regulator said.
“There are risks that older consumers’ financial services needs are not being fully met, resulting in exclusion, poor customer outcomes and potential harm,” the FCA said.
“Generalised approaches to dealing with older consumers may stereotype, patronise or offend. This can be challenging for firms operating at scale. It is vital that firms are given flexibility to use their own judgement.”
Meanwhile the housing market appears to be stabilising in spite of fears of a crunch in sales.
Data from HM Revenue and Customs showed there were 114,180 property transactions in the UK last month.
That is up 6.6pc from 107,140 in July, and up 5.6pc on August of last year. The number of transactions is roughly unchanged when compared with August 2015.
“Taking into account that August's completed transactions would have most likely been started either just before or after the General Election, and of course some months after Mrs May’s decision to invoke Article 50, what we are now consistently seeing is that the current political climate is not having a huge amount of impact on consumers’ decisions to move home,” said Brian Murphy at the Mortgage Advice Bureau.
“The driving factors remain individual circumstances, and buyers would appear to continue to remain unflustered by what they are reading in the headlines on a regular basis with regards negative sentiment around the UK housing market.”