Later life lending and retirement planning

Historically, equity release was often considered a last resort during times of financial uncertainty. Today, with the help of intermediaries and specialist lenders, it could play an important role in retirement planning.  

Data from a 2025 poll* by the Equity Release Council suggests that borrowers are using equity release to support financial goals, rather than to resolve financial pressures. According to the poll, 26% of borrowers are using equity release to repay existing mortgage balances, 21% are funding home improvements and 13% are gifting funds to family members.

That’s not to say that equity release is the only way to achieve those goals. Many older homeowners may still assume their options are limited, but advisers now have access to a much wider range of solutions, including Later Life, Retirement Interest Only (RIO) and Lending into Retirement mortgage products.

Supporting the next generation

Younger people face more challenges than previous generations when it comes to the housing market, and these stats highlight just how later life lending could help first-time buyers overcome those hurdles.

One example is Jeff and Margaret, a retired couple in their 70s who wanted to gift £145,000 to their son to help him get onto the property ladder. With multiple income streams including pensions, rental income and investments, they required a lender who would take these into account.

A Later Life mortgage from the Marsden enabled them to raise the funds while remaining in their home. We were able to offer a term to their 90th birthdays on an interest only basis, with downsizing as the repayment vehicle.

No need to downsize

With around one-in-five borrowers choosing to release equity to fund home improvements, this suggests that not all homeowners want to downsize in later life. This was true for Joan and Paul.

With their 80th birthdays approaching, they were nearing the end of a 25-year interest-only mortgage when their advisor approached us. Faced with limited options due to their age, they wanted to remain in the home they’d lived in for three decades.

A RIO mortgage with the Marsden enabled them to transfer their existing mortgage and add a little extra. As a result, they’ve been able to stay in their own home and install the stairlift they’ve been considering for some time.

Mortgages into later life

Mortgage terms lasting into retirement are no longer unusual. More than a quarter of those polled said they’re using equity release to repay outstanding mortgage balances. This isn't necessarily a sign of financial stress, for many it’s simply the result of longer life expectancy and later property purchases.

For this reason, it’s important that lenders remain flexible and adapt products to meet the needs of changing lifestyles. The opportunity for intermediaries lies in understanding the options available and matching their clients to the most appropriate solutions. It’s this collaborative approach that’ll help to support the ever-evolving needs of this growing market.

*Council publishes Q4 Lending figures 2025, January 2026