free2 launches first of its kind loan product specially for the over 55s market

free2 launches first of its kind loan product specially for the over 55s market
10.07.2020 01:26 pm

free2 launches first of its kind loan product specially for the over 55s market

Lending

free2, a new financial services brand for the over 55s market, today launches its first product, an unsecured loan which will allow customers to access a new source of funds by using their spare affordable pension income. This new product addresses the market need for a range of different options to raise capital in retirement, without having to put their house at risk, spend savings or drawdown taxable sums from flexible pension pots

The free2 loan is available at a competitive fixed APR and will allow those aged 55-70 to borrow up to £150,000 over five to twenty years. The loan is assessed against a customer’s guaranteed pension income and should they die before their loan is repaid, the debt is written off and there’s no liability to their estate.

The size of this loan for this demographic is unlike anything currently available on the market. For customers already in annuity contracts, it unlocks spare pension income, while it enables those who have yet to retire to keep guaranteed income rather than transfer to a flexible product and risk using valuable benefits. The product enables over 55s to use their finances flexibly, from supporting their family financially, such as helping children or grandchildren through university or onto the property ladder, to making significant changes to their own homes.

The product will be available online, through a proprietary platform that automates large parts of the application process and utilises innovative decision-based technology to address suitability criteria and to identify and protect potentially vulnerable customers. The platform harnesses the benefits of technology whilst maintaining human contact and providing a personalised service for its customers.

free2 is also in discussion with a number of partners about the development of an intermediary programme which it plans to launch later this year.

Commenting on the announcement, Paul Lindsay, Founder & CEO of free2, said: “We think that most financial services companies have not kept pace with the changing demands of the over 55s. We believe that people who can comfortably afford to do so should have the freedom and choice to borrow to maximise their options in retirement.

“If you’re over 55 and receiving an annuity you can’t access a lump sum from it, unlike those who retired after 2015 who enjoy pension freedoms. It’s also extremely difficult to borrow large sums of money, particularly over the long term. Our first product caters specifically for this market and is designed to help our customers finance important plans at this point in life. It is also more than likely that families will need help and support from relatives more than ever in light of Covid-19 as we move into uncertain territory.

“Our customers want security and peace of mind when considering a loan. That’s why we’ve built our business with responsibility at its core. We’re setting a new standard in customer protection that we hope will prompt others to follow suit. It’s now more important than ever to ensure customers are empowered through clear information and guidance on the suitability of financial products.”

free2 aims to provide a diverse suite of products which demonstrate its free-thinking approach to the UK over 55s market, each with customer protection placed at the heart of the application, acceptance and relationship management process.

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