The Intermediary –- May 2026 - Flipbook - Page 80
L AT E R L I F E L E N D I N G
Opinion
A shift in later
life lending
T
he Equity Release
Council’s latest
quarterly figures show
that equity release
lending fell by 9% in
Q1 – a 14% drop yearon-year. Some have described this
as disappointing and indicative of a
market losing momentum.
Viewed through a wider lens,
this data tells a more nuanced story.
Rather than signalling a decline in
demand from older homeowners, the
figures increasingly reflect a shi in
behaviour, product awareness and
advice outcomes across the mid and
later life market.
High interest rates and broader
economic uncertainty are clearly
factors. Elevated borrowing
costs continue to delay decisionmaking, and many customers are
understandably cautious about
locking into long-term commitments.
These pressures have slowed
completions across multiple lending
segments, not just equity release.
But economics alone does not
explain the full picture. Importantly,
equity release is no longer the default
solution for older borrowers. While
lifetime mortgages remain a valuable
and appropriate option for some, the
mid and later life lending market has
evolved considerably, and borrowers
now have access to a much wider
range of alternatives. At LiveMore, we
welcome this evolution.
Retirement interest-only (RIO)
mortgages, standard term based
products – whether interest-only,
capital and interest repayment, or
part-and-part – as well as bridging
and bespoke ‘retirement’ mortgage
solutions, are increasingly meeting
the needs of borrowers.
As awareness of these options
grows, it is only natural that equity
release volumes soen as customers
choose from a broader suite of
solutions that beer reflect their
circumstances.
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The Intermediary | May 2026
Our own experience supports
this. We continue to support clients
who are 40-plus, but the mix of
outcomes has changed. Around half of
LiveMore’s completions now involve
alternatives to equity release, with
borrowers accessing mainstream or
retirement focused mortgages that
allow them to retain flexibility, service
interest, or maintain greater control
over their long term finances.
Not shrinking, diversifying
UK Finance data showed a 20.5%
increase in later life lending volumes
in Q4 2025, and further insights into
Q1 will be closely watched. More
lenders are expanding criteria for
older borrowers, lending beyond
retirement ages, recognising a broader
range of income sources, and adapting
affordability assessments to beer
reflect modern retirement realities.
These developments are reshaping
outcomes, even if they do not
immediately show up in equity release
statistics. This is why we caution
against using equity release lending
alone as a proxy for market growth.
Greater consumer understanding
of alternative products will inevitably
impact equity release figures. That
should be seen as a positive sign of
a healthier, more competitive and
beer informed market, not a cause
for concern.
In this context, we welcome the
Financial Conduct Authority’s (FCA)
Later Life Mortgages Market Study.
The regulator’s desire to understand
whether the market can develop to
meet the increased and differing needs
of consumers is timely and necessary.
Later life borrowers are not a
homogenous group. Some are
still working full time, others are
semi-retired, many have a mix of
pension income, investment income
and earned income. Yet advice
conversations can still feel overly
product-led, with customers guided
toward a narrow set of outcomes
LEON DIAMOND
is CEO at LiveMore
rather than starting with their
individual situation and objectives.
At LiveMore, we believe mid and
later life advice must be truly holistic
– clear, balanced and tailored to
the borrower. Equity release can be
an important solution, but it must
sit alongside RIOs, mortgage term
extensions, repayment products and
emerging retirement mortgages as
part of a joined up advice framework.
This solutions-based mindset is
what underpins the development of
the LiveMore Mortgage Matcher®. By
focusing on outcomes first, it reduces
product bias and supports the delivery
of consistently suitable advice –
exactly the kind of evolution the FCA
is seeking to explore.
The regulator’s openness to
innovation, including products that sit
outside existing definitions of lifetime
or RIO mortgages, suggests there may
be scope for meaningful reform over
time. However, innovation may not
require entirely new categories.
For many borrowers, greater
flexibility within and between
existing product types could be
transformational – the ability to
move between repayment structures,
make optional payments, or adapt as
circumstances change.
Consumers should seek advice
from professionals who can genuinely
assess the full spectrum of later life
options. Advisers must stay informed
and equipped to discuss those
confidently.
Rather than signalling decline, the
ERC’s Q1 figures highlight a market
in transition. If the sector can move
away from silos and toward a more
integrated, customer-first approach,
the outcome will be a later life lending
market that works beer for everyone,
now and in the decades ahead. ●
