The phrase ‘later life lending’ is becoming increasingly common in financial services but what does it really mean?
For too long, ‘later life lending’ has been conflated with ‘equity release”. This confusion is not just semantic, it’s holding back a whole generation of borrowers, limiting consumer choice, misguiding advisers and stalling innovation among lenders. Equity release has become the default narrative for over-50s borrowing, but this binary thinking – equity release or nothing – doesn’t reflect the real financial landscape facing older consumers today.
At LiveMore, we believe later life lending is about much more than a single product category. It’s about understanding people’s full financial picture as they move into and through retirement. That means recognising pension assets, annuity income, savings, investments and other income streams as part of the affordability puzzle. It also means empowering brokers with agnostic, mainstream tools and product options to support borrowers aged 50 to 90+ without defaulting to equity release.
BREAKING THE BINARY: IT’S NOT JUST EQUITY RELEASE
Historically, the dominance of equity release in this space has come at a cost. Providers focused on these products have used ‘later life lending’ to describe their offerings, reinforcing a misleading narrative. But the market is far more nuanced. There is a wide range of products available for older borrowers, including retirement interest only (RIO) mortgages, standard interest only mortgages, capital and interest repayment products, and term-based lending designed specifically for retirement affordability.
These solutions offer flexibility and affordability, often with more transparency and simplicity than equity release, but they’re still misunderstood, or worse, overlooked, by the wider market.
THE IMPACT OF CONFUSION
When the language is unclear, everyone loses.
- Consumers miss out on more suitable or cost-effective solutions because they’re unaware of their full range of options.
- Advisers may narrow their recommendations, sometimes unintentionally, by focusing only on what they know or what yields the highest commission.
- Lenders face regulatory uncertainty and lack the incentive to innovate due to market confusion.
That’s why we need to redefine later life lending: not as a euphemism for equity release, but as a robust, diverse and future-focused category in its own right.
A STRUCTURED DEFINITION BENEFITS EVERYONE
Clearly defining later life lending as a distinct and inclusive category would transform the market. It would:
- Empower consumers with better information and wider choices.
- Support brokers in delivering truly holistic advice, rooted in each client’s real-life financial circumstances.
- Encourage innovation and healthy competition among lenders.
- Align with the Financial Conduct Authority’s (FCA) Consumer Duty principles, ensuring borrowers receive clear, fair and non-misleading information.
This redefinition isn’t about excluding equity release, it’s about placing it where it belongs: as one tool among many, not the only option on the table.
THE REGULATORY FOUNDATION ALREADY EXISTS
The FCA has laid the groundwork through its Mortgage Conduct of Business (MCOB) rules, which already require firms to:
- Consider whether a standard mortgage or equity release product is more suitable (MCOB 4.7A).
- Justify equity release recommendations by demonstrating alternatives were reviewed (MCOB 8.5A).
- Assess affordability based on a range of income sources, including retirement income (MCOB 11.6).
- Ensure fees and charges are fair and not excessive (MCOB 12).
Despite these rules, a lack of consistent language and blurred product boundaries continue to cause inefficiencies and risks to consumers. Clearer definitions would support better compliance and oversight across the board.
A COLLABORATIVE WAY FORWARD
What’s needed now is cross-industry collaboration. We propose establishing an open forum of lenders, brokers, trade bodies and regulators to create a clear, shared definition of later life lending, one that reflects the diversity of borrower needs and range of modern product solutions.
As an industry, we must:
- Promote holistic financial advice – brokers and advisers should be equipped and incentivised to explore the full spectrum of options for their clients, not just the ones they’re familiar with.
- Align regulation and guidance – MCOB guidelines should be refined to support a broader and more balanced approach to later life lending, in line with Consumer Duty.
- Fix the messaging – we need to ensure marketing, product names and adviser scripts are transparent, jargon-free, and reflect the real choices available to consumers.
WHY THIS MATTERS NOW
This conversation is urgent. The UK has an ageing population with increasingly diverse financial circumstances. Many older homeowners are still working, receiving mixed retirement income, helping younger family members or looking to move home. They need lending solutions that reflect their reality, not just outdated assumptions.
At LiveMore, we’ve built our model around this need. We assess affordability based on real retirement income, including pensions, investments, property and more. We support brokers with tools and products that don’t just tick boxes but actually serve their clients’ lives. We are agnostic in our product offering, focused not on selling equity release, but on solving problems.
Later life lending is too important to be left undefined. It deserves its own place in the financial services landscape, distinct from equity release, inclusive of innovation and driven by good outcomes for consumers.
It’s time to move from confusion to clarity. From outdated assumptions to modern, inclusive lending. From ‘either/or’ to ‘yes/and’. Let’s redefine later life lending, together.
