UK Finance’s latest Later Life Lending figures showed that the value of this lending was £6.2bn, marking an increase of 20.5% versus the same quarter in 2025.
However, UK Finance noted that the year-on-year comparison was “inflated” due to Q2 2025’s drop in lending after the stamp duty changes came into effect from April that year.
Some 5,730 new lifetime mortgages were advanced, a drop of 1.7% compared to the same quarter a year earlier but a rise of 8% versus Q1. The lending value was £490m.
From a retirement interest-only (RIO) mortgage perspective, 323 were advanced in the quarter – up 5.9% year-on-year. The value of this lending was £31m, a rise of 24% on Q2 2025.
As a proportion of total residential loans, residential later life loans represented 7.8%. Meanwhile, buy-to-let (BTL) later life loans accounted for 20.6% of all BTL loans.
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Value of later life lending needs emphasising
Despite the overall positive trend across the majority of the figures, Dave Harris, CEO of More2life, said greater awareness of later life lending would boost its use.
He added: “Today’s later life lending figures from UK Finance reinforce our call to make it mandatory to signpost all later life lending options, including equity release, to all later life borrowers. In Q2, just 5,730 borrowers took out a lifetime mortgage, with 37,300 loans in total to older borrowers over the quarter. Against a backdrop of 15 million people in the UK undersaving for retirement, that number should be far higher than it is.
“Lenders carry just as much responsibility here as advisers. Mainstream lenders sit at the heart of the customer journey too, and when a client reaches the end of a fixed rate, they should be pointing them towards the full range of options, not just a product transfer.”
He continued: “Recent research from Fairer Finance found that seven in 10 over-55 homeowners have heard of equity release, but only 13% have ever seriously considered it. If we were to collectively work together as industry to widen knowledge and understanding among both consumers and advisers, that figure would be a lot higher, and far more people would come away with a solution that could make a significant difference to their lives in retirement.
“We’re clear that with the right regulatory framework in place, the lifetime mortgage market has the potential to live up to the Financial Conduct Authority’s (FCA’s) billing as the fourth retirement pillar. But more importantly, it would lead to much better outcomes for those who need access to capital in later life.”
Jim Boyd, CEO of the Equity Release Council, commented: “Today’s figures show the later life lending market continuing to evolve as housing wealth becomes an increasingly important part of retirement planning. The 8% quarterly increase in new lifetime mortgages, alongside growth in retirement interest-only lending, reflects the range of options available to older borrowers as they look across their assets to support their financial needs in later life. The FCA’s recognition of later life lending as a potential fourth pillar of retirement funding, alongside pensions, savings and investments, reflects the reality that people are increasingly looking across a wider range of assets to support their financial needs in later life.
“This is about more than market growth. It is about ensuring consumers can access the right guidance and advice to make informed decisions about all their assets. With the Pensions Commission highlighting the scale of retirement inadequacy and Fairer Finance modelling that 51% of households aged 60 and over could benefit from accessing housing wealth by 2040, the need for a more joined-up approach is becoming harder and harder to ignore. The industry now has an opportunity to build on stronger standards, greater product flexibility and the FCA’s fourth-pillar vision to deliver good consumer outcomes at scale.”
