Property wealth set to become an increasingly important retirement asset
The Financial Conduct Authority (FCA) believes housing wealth could become a key source of retirement funding in the future, alongside pensions.
New research suggests more than half of over-60 households could benefit from accessing property wealth by 2040, prompting calls for greater awareness, improved advice and continued innovation in the later life lending market.
Speaking at the Later Life Lending Summit on 16 June, FCA director of retail banking Emad Aladhal said that accessing property wealth should no longer be seen as a last resort. Instead, he suggested it could become a “fourth pillar” of retirement funding alongside the State Pension, workplace pensions and personal pensions.
The comments come as new research from Fairer Finance suggests that by 2040, more than half (51%) of households aged 60 and over could benefit from tapping into their housing wealth in retirement. Those households are expected to hold around £4.3 trillion in property wealth, with the potential to unlock around £23 billion a year in today’s prices.
Market needs to be ready for future demand
Despite this potential, latest FCA data shows that of the almost 330,000 mortgages taken out by over-55s in 2025, only around 30,000 were lifetime mortgages or retirement interest-only (RIO) mortgages – both potential ways to tap into property wealth.
Aladhal said: “Later life lending needs to be something consumers consider early, openly, and with confidence as part of their long-term planning.”
He added that while today’s products offer more flexibility and consumer protections than ever before, lenders and providers must continue to innovate to meet the changing needs of future retirees.
Greater awareness and more joined-up advice
Emad Aladhal also highlighted the need for consumers to receive more holistic retirement advice. In his speech, he explained that many people only consider options such as equity release when they are under financial pressure, rather than as part of wider retirement planning.
He questioned whether low take-up is being driven by a lack of awareness, a lack of trust, or a combination of both. He also touched upon the way retirement planning is often split between different areas such as mortgages, pensions and investments, arguing that consumers would benefit from more joined-up advice.
Technology, including artificial intelligence and data-driven tools, could also play a role in helping consumers understand their options and engage with retirement planning earlier, he suggested.
What this means for homeowners
For many people, retirement planning starts and ends with their pensions. However, the FCA is encouraging both consumers and advisers to take a broader view of retirement finances, particularly as more homeowners reach retirement with significant property wealth.
That doesn’t mean equity release will be the right choice for everyone. But the regulator believes housing wealth should be considered alongside pensions, savings and investments when exploring ways to fund later life.
With people living longer and retirement lasting for decades, the FCA expects property wealth to play a bigger role in helping some homeowners achieve greater financial flexibility and security in retirement.
Whatever option you choose, it’s important to take time to research the alternatives and understand how they could affect your finances both now and in the future. Equity release can provide valuable access to tax-free cash, but it can also reduce the value of your estate and may affect entitlement to some means-tested benefits.
Seeking advice from a qualified later life lending specialist can help you understand the pros and cons of each option and decide whether using your housing wealth is the right fit for your retirement plans.
Sources
More than half of over-60 households could benefit from accessing property wealth by 2040. Financial Conduct Authority: Later life lending: building the fourth retirement pillar. Accessed 22 June 2026.
