Later life lending has moved well beyond being an occasional enquiry about equity release or a maturing interest-only case.
It is now a consistent and growing part of client conversations, as increasing numbers of people in their 50s, 60s and 70s review their finances with greater intent, with property wealth central to those discussions.
Retirement itself looks different. Many borrowers are drawing income from several sources as some continue working part-time, while others are managing defined contribution pensions with greater flexibility.
In this context, housing equity is no longer viewed as something to preserve at all costs, it’s an asset that can be used carefully to support income, clear existing borrowing or improve quality of life.
The most recent figures from the Equity Release Council underline this shift. The equity release market grew by 11% in 2025, with total annual lending rising from £2.3bn in 2024 to £2.57bn.
In Q4 alone, lending reached £632m, up 1.6% on the same period in 2024. The average release increased by 5.7% year-on-year to £123,174, and 1,468 customers returned for further advances, compared to 1,411 a year earlier.
WHERE RETIREMENT INTEREST-ONLY FITS
Growth has been strong, but it’s fair to say that the market is still operating below its potential. One reason is that many conversations continue to focus heavily on lifetime mortgages, when the later life sector now offers a broader mix of options.
This wider landscape includes solutions designed to meet different needs and income profiles. Among them, Retirement Interest-Only (RIO) mortgages are establishing a clearer and more defined role.
With a RIO mortgage, borrowers make monthly interest payments and the capital is repaid when the property is sold, typically following death or a move into long-term care. There is no roll-up of interest, and the balance remains stable provided payments are maintained.
This can appeal to clients with dependable retirement income who want certainty around monthly costs and greater control over their equity position.
It can also offer a practical solution for those reaching the end of historic interest-only terms who are not in a position, or do not wish, to move home.
The purpose of later life borrowing is widening. Equity Release Council data shows 26% of advisers report customers using equity release to clear existing mortgage balances, while 40% say equity release is being put towards positive uses such as paying for home improvements (21%), holidays (6%), other large purchases such as a car (4%) – or gifting to the family (13%)
Similar drivers are evident in RIO cases, with borrowers restructuring finances after fixed rates end or planning ahead to support family or adapt their homes.
THE CENTRAL ROLE OF ADVICE
Affordability and forward planning remain central. Under our criteria, RIO is assessed on retirement income alone, with earned income excluded and each applicant in a joint case required to afford the mortgage independently.
This helps ensure sustainability if circumstances change. Pension security, potential care costs and inheritance intentions all form part of the discussion.
The client base is also shifting. Alongside older borrowers with maturing interest-only mortgages, there is growing interest from younger retirees taking a structured approach to using housing equity.
This is reflected in activity levels. At Hanley, RIO applications in January and February were up 22% year-on-year compared with the same period in 2025, indicating steady momentum within this specialist segment.
To support early conversations, we have introduced a dedicated RIO affordability calculator, providing an instant illustration of potential borrowing based on retirement income and helping to focus discussions from the outset.
A MATURING MARKET
With 80% of advisers surveyed by the Equity Release Council expecting overall lending volumes to rise next year, and only 2% forecasting a fall, this is a sector set to remain a significant area of focus and opportunity.
Much of the future opportunity lies in recognising that retirement is not a single event but a phase that can span decades. Property often forms the largest component of personal wealth and understanding how, and when, to use that asset responsibly will continue to shape demand.
It’s important to clarify that RIO is not suitable for every client. However, within a market that is steadily broadening, it has become an established and increasingly relevant option. And clear advice, robust affordability and realistic planning will remain central as this segment continues to evolve.
