The Intermediary – March 2026 - Flipbook - Page 68
L AT E R L I F E L E N D I N G
Opinion
Time to
rethink later
life lending?
orrowing later in life is
no longer niche. It now
forms a core part of
the lending landscape.
However, terms like
‘later life lending’ still
imply something exceptional. The
reality is far more nuanced.
The fact is, we are now operating
in a market shaped by factors like
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The Intermediary | March 2026
longer working lives, evolving
retirement paerns and profound
demographic change.
Based on past Office for National
Statistics (ONS) data, we can see that
employment rates among older age
groups have remained historically
strong. From a record high in 2019 of
72.6% to 70.4% in 2022, from where it
has increased each year since.
This has led to many of these
individuals continuing to work into
their late 60s due to increases in
Government-recognised retirement
ages, amongst other possible personal
reasons like financial security.
At the same time, over-50s now
represent roughly 40% of the UK adult
population. It’s clear that this age
range is not a niche segment. It has
evolved into a structural pillar of the
housing and mortgage market.
For decades, borrowing beyond 50
was framed as unusual. Underwriting
models were built around a sharp
transition from employment to
retirement, with affordability
assumptions tapering off at a
predetermined age. However, it’s clear
now that the traditional cliff-edge no
longer reflects lived experience.
Retirement is increasingly phased
rather than abrupt, leading to income
in later life being layered well beyond
what previous models anticipated.
Crucially, those income layers extend
far beyond continued employment.
Complex affordability
For many borrowers, later life
affordability is supported by a
diverse mix of income streams –
state pension, defined benefit (DB)
pensions, defined contribution (DC)
schemes, annuity income, investment
returns, SIPP drawdown, and hybrid
arrangements that blend earnings
with pension withdrawals.
The sustainability and predictability
of these income sources mean many
retirees remain perfectly suitable for
long-term borrowing, even when no
longer in full-time work.
It is, therefore, unsurprising that
many mainstream lenders now offer
mortgage terms extending to age 80,
85 and beyond, subject to affordability.
