MortgagesSep 23 2014

CML urges gov’t to include mortgages in guidance guarantee

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The Council of Mortgage Lenders has urged the government to include explicit reference to outstanding debts, including mortgages, in its proposed at-retirement ‘guidance guarantee’.

In its response to the Financial Conduct Authority’s consultation paper on retirement reforms and the guidance guarantee, the organisation argued that because “a considerable number of people” at retirement will still have an outstanding mortgage, it is crucial for such commitments to be taken into account.

The document cited a recent government survey of English housing found that more than 1.3m households are headed by someone aged over 55 who still has a mortgage, and those households with a mortgage account for 36 per cent of those aged 55 to 64.

The CML raised concerns about people repaying capital on an interest-only mortgage, who should be advised to contact their lender, or at least asked if they have sought to make contact.

It added that there should not be an automatic assumption that a pension pot ought to be used to pay off the capital as this decision would be one best served by an independent financial adviser.

“Similar considerations could arise for those that have other debts, who would also probably be best helped by an independent debt adviser,” read the statement, adding that if the customer is in arrears with their mortgage, they should contact their lender.