It’s fair to say that later life lending has moved from a niche corner of the market into a more mainstream space, as older borrowers seek new ways to manage loans, maintain income, clear debt, and support their families.
This shift has become clearer as more brokers recognise the broadening case profile and the growing need for long-term planning.
Fresh data adds useful context. Analysis of more than 1,000 customer cases from Key Group, covering Q2 2024 to Q1 2025, shows a marked shift in how homeowners draw on property wealth.
Over the period, the share of new plans used mainly to repay an existing mortgage rose from 36% to 63%, highlighting clear demand for greater stability in later life finances.
Within this, discretionary uses for home improvements fell from 14% to 5%, property purchases from 7.9% to below 2%, and vehicle purchases from 7.7% to 3.9%.
Two-thirds of customers also split their release across more than one need, with only 31.6% using funds for a single purpose (commonly mortgage repayment or debt), 32.7% divided funds across two purposes, 21.6% across three, and 9.5% allocated funds to four or more priorities.
CAPITAL RELEASE
The data also shows regional variation with Londoners releasing an average of £145,471 per plan in 2025, more than double the UK regional average and over £27,000 more than the previous year.
The typical customer is 69, with 59% of plans taken on a joint basis, and women forming the majority of single applicants.
Alongside this, the latest UK Finance data shows later life lending on the rise by both volume and value. In Q3, there were 39,950 new loans advanced to older borrowers, up 18.4% year on year, with the value of lending increasing by £6.5bn, up 24.7% compared with Q3 2024.
Within this, 6,040 new lifetime mortgages were advanced, up 3.4% annually, with a total value of £530m to signify a rise of 3.9%. RIO lending also increased, with 335 mortgages advanced in Q3, up 11.7%, with the value rising 11.1% to £30m.
RIO FOCUS
Focusing on RIO mortgages, these allow later life borrowers to pay interest monthly without a capital repayment term, giving more predictability and helping them to stay in their homes.
This may not suit every borrower, but it should be considered where decisions involve several factors and where there may be emotional as well as financial pressures.
Larger initial advances and smaller drawdown facilities point to a shift towards meeting fixed and immediate needs rather than setting aside funds for later use.
This means advisers must look closely at income, tax treatment, benefits, and any possible pressure on future affordability when assessing RIO cases.
LEGAL CLARITY
Later life borrowing also works best when legal arrangements are in place. A lasting power of attorney (LPA), or a continuing power of attorney in Scotland, gives clarity and continuity. This can make a major difference where health changes or family support needs increase.
For financial decisions, an LPA allows the chosen attorney to manage the borrower’s affairs, settle bills, arrange repairs, and deal with property-related matters. It can be used while the borrower still has capacity if this preference is set out at the start.
A second type of LPA covers health and care decisions, but this only comes into effect if the borrower loses capacity.
Including an LPA into later life planning helps advisers carry out their work with greater certainty, and it also protects families from delays or disputes during what may already be a difficult time.
THE LENDER’S ROLE
Our role as a lender is to make clear how and when an attorney may be involved and to ensure that the customer’s wishes remain the central focus.
After all, older borrowers deserve a clear, safe route through the lending journey and with rising life expectancy, changing pension patterns, and later life attitudes shifting, the market must keep adapting.
A responsible approach is central to this, in terms of setting clear criteria, assessing income with care, and ensuring that products are suitable for long-term needs. It also means making sure borrowers understand the consequences for their estate, their family, and their future care needs.
Strong advice, clear communication, and robust planning remain the foundations of good outcomes for customers at this stage of life and, as a Society, we will keep refining our later life proposition with these aims in mind.
