The Intermediary – March 2026 - Flipbook - Page 69
L AT E R L I F E L E N D I N G
Opinion
The market and criteria have quietly
evolved to fit our new working lives –
yet the language has not.
Equally important is the shi
in borrower motivation. Later life
borrowing is no longer driven purely
by necessity or distress. It is oen a
strategic choice.
Many homeowners in their 50s,
60s, and 70s are using property wealth
to maintain lifestyle flexibility, fund
home improvements, or manage tax
and estate planning considerations.
This reflects a broader societal
shi – from age as a limiting factor
to age as simply another stage of
financial planning. The conversation
is increasingly about autonomy and
flexibility rather than constraint.
Product innovation
Around 650,000 interest-only
mortgages are due to mature within
the next decade, creating a substantial
refinancing challenge. For many
borrowers, downsizing is neither
desirable nor practical. Product
innovation has therefore become
essential in providing credible
alternatives.
Retirement interest-only (RIO)
mortgages, formally part of the
regulated market since 2018, have
moved from being viewed as niche to
becoming an established component
of adviser-led solutions.
In practice, RIO oen functions less
as a retirement product and more as a
cashflow management tool, allowing
borrowers with sustainable income
to service interest while preserving
capital and maintaining stability in
their home.
But it is important to recognise that
RIO does not serve only financially
sophisticated or strategically minded
borrowers. It also provides a route for
customers approaching end-of-term
interest-only maturities who need
a stable, regulated solution without
being forced into disruptive choices.
Some borrowers are still working;
others have layered or part-retirement
incomes; others are looking to remain
in their homes while managing
income certainty. The common theme
is not savvy planning – but suitability.
Many borrowers using RIO are
not fully retired. Some remain in
employment, while others have
blended income streams combining
pensions, investments and
part-time work.
This raises a broader question about
terminology. The phrase RIO may no
longer accurately describe how the
product operates in today’s market.
Framing the product purely around
retirement risks reinforcing outdated
assumptions about dependency, when
in reality, many of these borrowers are
financially confident and strategically
managing their wealth.
The same applies to the wider
label of ‘later life lending’, which can
unintentionally imply vulnerability
rather than reflect the sophistication
and intentionality that now
characterise borrowing beyond 50.
The real complexity in today’s
mortgage market is not age, but
choice. Product lines now overlap,
with mainstream residential terms
extending further and interest-only,
RIO and hybrid structures siing
within the same advice framework.
At the same time, affordability
assessments have become more
nuanced, reflecting layered income,
pensions, and drawdown strategies.
All of this reinforces the importance
of high-quality, holistic mortgage
advice. Suitability in later life is rarely
determined by age alone – it depends
on income mix, sustainability, tax
position, longevity planning, and
long-term housing intentions.
Advisers play a crucial role in
assessing whether a borrower is
AARON SHINWELL
is chief lending officer at
Nottingham Building Society
beer served by an extended-term
residential mortgage, a traditional
interest-only structure, a RIO, or a
combination of approaches.
Sign of the times
If the market has evolved – and it
clearly has – our language should
evolve with it.
Rather than segmenting borrowers
by age, the industry should frame
conversations around life-stage
planning, longevity, and flexible
mortgage solutions that reflect
modern financial journeys.
Borrowing beyond 50 is no longer
exceptional; it is mainstream and
increasingly driven by informed
choice.
With the right advice, borrowers
can navigate these choices confidently,
ensuring that products match both
their financial circumstances and
their long-term goals.
The industry has adapted its
products to demographic reality. Now
its framing and advice culture must
follow – recognising this not as ‘later
life’ lending, but part of a longer, more
personalised financial journey. ●
March 2026 | The Intermediary
67
