The Intermediary –- June 2026 - Flipbook - Page 82
L AT E R L I F E L E N D I N G
Opinion
The debate is
finally catching up
with reality
I
n 1942, Sir William Beveridge
set out a blueprint that helped
define the modern welfare
state. Its premise was simple:
structured social insurance
would protect people from
major life risks, including income
in retirement.
For decades, this idea broadly
held. State provision and workplace
pensions formed the backbone of later
life security and delivered a relatively
coherent system for retirement
income. The issue today is not that
the system failed. It is that the world
around it has changed.
People are living longer. This year,
an estimated 470,000 Baby Boomers
will celebrate their 80th birthday.
Generous defined benefit (DB)
pensions have largely disappeared
from the private sector. Housing
wealth has grown while pension
outcomes are more uneven.
Retirement has become more complex
than the framework designed to
support it.
The Pensions Commission’s interim
findings make this clear. Around
15 million people are currently
under-saving for retirement, rising
to a potential 19 million without
action. Automatic enrolment
(AE) has increased participation,
but participation does not
guarantee adequacy.
These pressures are not theoretical.
Nearly three million people are
expected to reach state pension age
this decade without sufficient savings
to achieve a moderate standard of
living. At the same time, over-60s hold
£3.84tn in housing wealth, more than
half of UK net housing wealth.
This points to a simple reality.
Retirement funding is multi-asset
whether policy fully reflects it or
not. UK Finance data reinforces
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The Intermediary | June 2026
this. Lifetime mortgage volumes
have soened, but activity remains.
Borrowing paerns suggest caution
rather than withdrawal, with
consumers adjusting how they access
housing wealth.
This is not retreat. This is an
adaptation in how retirement
resources are used. Increasingly,
retirement is funded through
pensions, savings and housing wealth
deployed flexibly rather than in
isolation. Pensions no longer describe
the full picture.
An effective approach
Housing wealth is particularly
significant. For many households it is
their largest asset, yet it remains only
partially integrated into retirement
planning.
Fairer Finance suggests that by 2040
more than half of households may
need to access housing wealth in some
form to support retirement needs.
This is evidence that outcomes will
depend on the combination of assets
rather than any siloed solution.
Housing wealth is already part of
the system. Since 1991, almost £50bn
has been accessed through Equity
Release Council members, supporting
more than 950,000 homeowners.
Today, equity release accounts for
around £1 in every £90 spent by
retired households.
The question is not whether
pensions, savings or property maer
most, but how they work together.
The Pensions Commission also
raises how people access retirement
savings. Its interim report calls for
stronger protections and a default
decumulation approach to turn
pension pots into income.
However, there is a risk that
this could narrow how retirement
funding is understood. If guidance is
JIM BOYD
is chief executive
at the Equity Release Council
built around pensions alone, it risks
reinforcing fragmentation.
That leads to a fundamental
issue: how people receive guidance
and advice. The system remains
structured around silos. Pension
guidance, mortgage advice and
financial planning operate separately.
As a result, many people don’t take a
joined-up view of their retirement.
A more effective approach would
reflect retirement as a single financial
transition involving multiple assets.
It would ensure pensions, savings and
property wealth are considered within
the same decision framework.
None of this requires weakening
consumer protection. Modern equity
release operates within a longestablished framework, including
protections against negative equity,
the right to remain in the home for life
and enhanced repayment flexibility.
The system has changed. The
policy framework has not caught up.
Beveridge’s legacy was institutional
adaptation as much as institutional
design. It was the recognition that
when society changes, systems must
change with it.
The same principle applies today.
Retirement funding is already more
distributed than the structures
designed to support it. Consumers
are adapting by combining pensions,
savings and housing wealth.
The task now is not to reshape that
behaviour, but to ensure the system
recognises it, supports it and guides
it more effectively. If the retirement
funding debate is finally catching
up with reality, it’s time the system
does too. ●
