What’s behind the rise in later life lending?

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How homeowners aged 55+ are tapping into their property wealth

Later life lending in the UK is gathering pace, with recent industry data showing an unmistakable uptick in borrowing among homeowners aged 55 and over. 

Pressures on household budgets and evolving retirement needs are reshaping the borrowing landscape. More older borrowers are turning to a diverse range of products, from traditional mortgages to specialist later life solutions.

Rising numbers across the board

Recent lending figures from UK Finance reveal that lending to older borrowers continued to climb through 2025, with new loans showing robust year-on-year growth. In the third quarter of 2025, almost 40,000 loans were advanced to those aged 55 and over, up 18.4% compared with the same period in 2024. 

The total value of that lending reached £6.5 billion, a near-25% increase on the previous year. Within this, specialist products such as lifetime mortgages and retirement interest-only (RIO) mortgages also posted gains, with volume and value increasing on the prior year. 

Meanwhile, Vernon Building Society saw a 158% increase in its retirement interest-only (RIO) mortgages in the period Jan-May 2025 compared to the same period in 2024. 

Equity release

Equity release, which allows homeowners to access the value tied up in their homes without selling, has shown meaningful growth. Recent data from the Equity Release Council reports that total equity release lending increased by 11% in 2025, rising from £2.3 billion in 2024 to £2.57 billion last year. 

While some older homeowners take equity release simply to boost retirement income, a significant proportion do it to repay outstanding mortgage balances. Others are releasing money to support home improvements, fund lifestyle expenses such as holidays, or help them with major purchases, including cars. 

This diverse range of reasons to use equity release suggests that equity release is often viewed not just as a last-resort option, but as a strategic tool in later life financial planning.

What’s driving the rise in later life lending?

Multiple forces are contributing to this growth, including.

Demographic changes and longer lifespans

Many borrowers are carrying debt or looking for financial flexibility well into retirement. Traditional mortgage terms, once rarely going past age 65, increasingly extend into older age brackets. This trend is underscored by lenders reporting higher volumes of lending into later life. 

Economic pressures

Higher living costs, stagnant pension incomes and the rising cost of care have pushed some older households to explore alternative sources of funds. The challenge of rising costs with constrained income has been highlighted by some market commentators as nudging more retirees toward equity release and other products that help unlock housing wealth. 

Changes in product design 

Greater lender innovation is making later life lending solutions more flexible and attractive. Drawdown lifetime mortgages, for example, allow borrowers to draw funds as needed over time rather than in a single lump sum. There are also options for repaying some or all of the loan and/or interest early, such as with an interest-only lifetime mortgage.

Growing public awareness

The growth of online later life lending content and television advertising by equity release companies has helped to educate older homeowners about their borrowing options. Financial advisers may also be more aware of the options available to their clients, partly thanks to providers’ adviser-focused marketing campaigns.

Balancing growth with caution

While the expansion in later life lending reflects positive developments, it also underscores the importance of advice and careful planning. Borrowing against property wealth, especially in retirement, carries long-term implications for estate planning, inheritance and financial security. 

Industry bodies and advisers emphasise that while these products can provide valuable financial support, homeowners should be fully informed about both the pros and cons of each option.

Thankfully, there is protection for consumers, including the Equity Release Council’s product standards. The Financial Conduct Authority also plays an important role and is launching a new later life lending market study to further ensure robust protections are in place.