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The language we use has always been important, but now it seems to be under scrutiny more than ever.
I am fascinated by the quicksand of what can and cannot be said in polite society, and no matter how hard I try to keep up, I almost certainly still fall into some outdated terminology. But I will always try.
In business, language is just as important. You cannot be “cancelled” but certain phrases, words and terms can have a detrimental effect on how we view financial decisions.
When people need help, let’s not make them worse
This is especially true for issuing shares. Time and time again I see the lifetime mortgage compared to a “family silver sale” or phrased as a “raid on the family inheritance”; and every time I sigh, I think, “Does it matter?” and try to get on with my day.
I know that our little corner of the market has helped tens of thousands of people achieve their retirement dreams or ease the pressure of mounting money problems. But that negative view still bothers me. And I think it should worry you too. That’s why.
Installation cost
First, it’s hard. A lockdown can be implemented and we hope the pandemic will be a thing of the past, but the hard times are far from over.
The cost of living crisis has hit families, and for those nearing the end of their working lives, or those who have retired, rising costs are the last thing they need. In fact, according to research by AJ Bell, the cost-of-living crisis has forced almost a quarter of retirees to delay retirement.
Potentially, millions of people will have to consider their property as an alternative way to retire.
What’s more, not only is everything from energy to eggs growing, but the biggest and most important expense for many people is also growing: their mortgage. The spike in interest rates that followed the catastrophic mini-budget has hit — or will soon hit — many people looking to extend their mortgages. Up to 1.4 million households are facing higher rates as their policies expire over the next year, and more than half (800,000) are facing a doubling of their rates, according to the Office for National Statistics.
All of this prompted the Financial Conduct Authority to warn that a staggering three-quarters of a million households are at risk of defaulting on their mortgages.
All pretty grim news, right? But what does that have to do with language or how we talk about finance? So what options do people have when faced with this grim reality?
Time and time again I see life mortgages being compared to a “family silver sale.”
Many will rely on their pensions and more people are already diving into their piggy bank as £3.6bn was withdrawn from the flexible pension basket from April 1 to June 30 last year, up 23% from 2021. according to AJ Bell report. . However, many pensions are simply not enough. Property may need to come to the rescue, and this is where language comes into play.
Even though so many people need help when they retire, remortgaging at a later age or using products like equity issuance is still often looked down upon in society. For some reason, the use of wealth is considered bad luck once a person reaches a certain age. Despite their financial problems, the use of capital is so often ridiculed by the mainstream media and by those fortunate enough not to need help.
Many pensions are simply not enough. Real estate can help
Tedious tropes such as “savings theft” or “inheritance burning” are worth a penny in most tabloid “analysis” of senior lending, and these discarded phrases underlie the outdated and unhelpful belief that remortgaging at a later age should be avoided at all costs. .
Flip the script
In the end, people live longer, pensions are not enough, everything becomes more expensive. All this leads to an equation in which potentially millions of people will have to consider their property as an alternative means of financing their retirement.
Thus, re-attacking this option and presenting it as some kind of failure will not help anyone. Let’s flip the script. We need to make it less of a “traditional foray” and more of a “vital security system” that many homeowners will be grateful they can rely on. And the more people consider this option the main one, the more options, flexibility and competitive rates will be available as new lenders enter the market.
In business, language is just as important.
In fact, when people need help and the situation is dire, there is no need to make them feel even worse.
Wealth is becoming an integral part of many people’s retirement plans, and this should be accepted without a hint of negative discourse.
Andrea Rosario is the corporate director of Bower.
This article was published in the February 2023 issue of MS Magazine.
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