It can seem to take an age for the FCA to wake up to what is happening outside its cloistered corridors in Canary Wharf.
So, we should welcome its consultation on removing regulatory barriers to allow retirement interest-only mortgages. These would allow lenders to offer loans repayable on specific events such as death or going into residential care.
Previous FCA policies led lenders to clamp down on mortgages for older customers with arbitrary cut-off ages, sometimes as low as 65, regardless of their ability to pay.
Through my Money Mail column I have been contacted by desperate pensioners who fear being thrown out of their homes because their interest-only mortgage term is almost up.
Previous FCA policies led lenders to clamp down on mortgages for older customers with arbitrary cut-off agesWhile they can afford the interest payments, they do not have a means of repayment.
Lenders have generally been helping borrowers on an individual basis, but the bigger ones have been reluctant to embrace across the board home loans for older pensioners.
With about 40,000 interest-only mortgages reaching maturity every year over the next decade or so, a case-by-case approach will not be good enough.
Rather than being seen as a problem to be resolved, retirement borrowers must be treated as another segment of the market to be served.
Currently only a few building societies, such as National Counties, have taken an enlightened approach and been willing to serve older borrowers.
This has left equity release as the only option, which can be expensive to set up, have higher interest rates and in some cases carry onerous terms for early repayment.
Equity release has its place, but opening the market would stimulate competition – helping to squeeze interest rates and hopefully creating better deals.
It would also allow more borrowers to stay with their existing lender – not always the best approach financially, but certainly one favoured by those who want simplicity in their financial dealings.
Pensioners with a reliable income are arguably in a better position to afford an interest-only mortgage than younger people whose earnings might fluctuate and whose outgoings could well rise if they start families.
It is the regulator’s responsibility to ensure all consumers – whatever their age – can benefit from a wide market choice.
The FCA seems, belatedly, to have woken up to this fact.
Out of touch on Isas
Recent HMRC figures recorded a fall in cash Isa sales of 1.6m in 2016/17. Overall investment fell to £39bn from £59bn the previous tax year.
But there was no corresponding uplift in investment Isa sales, which held steady, putting on a mere £1.2bn.
This is not a story of saving versus investing. Rather it is a question of filling your boots and then having nothing left to stuff in them.
When the annual cash Isa subscription level was £3,000 there was a need to make sure you bottled and stored the allowance every year. As recently as 2014 the limit of £5,760 has the use-it-or-lose-it cache. But £20,000 is more than most people can dream of putting away in a year. Double that to £40,000 for a couple and most people probably see no need to rush in.
Three years of a £15,000-plus investment limit have allowed couples to squirrel away £90,960 between them. Overall subscriptions rose to more than £80bn in 2014/15 with cash Isas accounting for about £60bn of this. The numbers fell slightly in 2015/16, but were still very high. Is it any wonder that saving into cash Isas lost steam last year?
The fact remains that overall subscriptions last year were still the third highest on record and cash Isas were higher than in 2013/14.
Wealthy investment experts who screech warnings that people need to use or lose an Isa allowance basically succeed only in making themselves look out of touch and ridiculous.
Take complaints seriously
The Financial Ombudsman’s complaints data gives a good guide to corporate belligerence. Lloyds and Bank of Scotland may, partly through size, have received most new complaints. But Aviva suffered a 93 per cent uphold rate on PPI with American Express at 88 per cent and Black Horse at 76 per cent.
On investments, Alliance Trust suffered an uphold rate of 58 per cent, twice the industry average of 29 per cent, while Barclays Bank managed 52 per cent.
John Lewis will not have been happy to see an overall uphold rate on complaints of 70 per cent on its financial services against an industry average of 36 per cent.
HSBC, which runs John Lewis Financial Services, will hopefully have been reminded by John Lewis of the reputational damage of a high placing on such tables.
Tony Hazell writes for the Daily Mail's Money Mail section
