The FCA needs to review its approach to later life lending, particularly the current placement of Retirement Interest-Only (RIO) mortgages within its mainstream mortgage rules, former FCA Mortgage Policy Manager, and industry consultant, Lynda Blackwell has said.

Speaking at today’s National Later Life Adviser Conference, Blackwell said “the regulator is causing real problems in the silo approach it takes to markets”.

“The RIO situation really brought this home to me, especially given there is the same need for advice and support with RIO as there is with equity release, but it brought a residential approach to the rules [for RIO].”

She added that the FCA’s approach to RIO was founded on it being designed to “help the big banks with a problem it had”, namely how it helped customers coming to the end of interest-only mortgage deals. Blackwell said the FCA had been lobbied very hard by those big banks to adopt such an approach.

She argued that this however was “cooking up a problem” in the gap that exists between RIO and equity release products and urged the regulator to “think about this again”. She said: “The regulator needs to have a long, hard look at what this looks like from the consumer’s perspective.”

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