Later Life Lending: How Older Clients Are Using a Wider Range of Financial Solutions

Later life financial planning has evolved. Today’s over-55s are not just thinking about pensions, they’re navigating mortgages, debt, family support and lifestyle choices, all at the same time.

As a result, many older clients are exploring a broader range of lending options as part of their retirement strategy. Equity release is no longer seen as a last resort, but as a flexible tool that can support retirement goals, manage debt and even help the next generation.

Below are three real-life scenarios that highlight how later life lending can play a valuable role.

Paying Outstanding Debts Before Retirement

Carol (65) and Jeff (69) are planning for retirement. While they live comfortably on their current incomes, they’re concerned their pension won’t stretch far enough to maintain their lifestyle.

Their financial picture includes:

• £13,000 remaining on a car loan
• £7,000 of unsecured credit card debt
• An interest-only mortgage maturing next year with a £125,000 shortfall

That’s £145,000 of debt, all of which would put significant pressure on their pension pot if left unresolved.

After taking advice, the couple explored several options including downsizing, a Retirement Interest Only mortgage and equity release. However, she and Jeff love their home and don’t want to relocate. Their priority is entering retirement debt-free and financially secure.

Based on the age of the youngest applicant (65) and a property value of £600,000, they could release up to £217,500 from their home.

This would allow them to:

• Clear all outstanding debts and the interest-only mortgage
• Retire without drawing on their pension to repay borrowing
• Retain £72,500 to support their retirement lifestyle

Importantly, they also have the option to make voluntary interest or capital repayments if they wish, helping them manage the loan flexibly, without ever risking being forced out of their home.

With 261,000 interest-only mortgages due to mature by 2027, and total debt among the over-55s expected to reach £402bn by 2032, scenarios like Carol and Jeff’s are becoming increasingly common.

Helping Children Onto the Property Ladder

Equity release isn’t just about retirement – for many families, it’s about supporting loved ones.

Mike (60) and Judy (59) live with their 26-year-old daughter, Jessica, who wants to buy her first home rather than rent. She’s saved £5,000 and is aiming to buy a £250,000 property near her parents.

Based on her income, Jessica can borrow £200,000, leaving her £50,000 short for a deposit.

The family explores several options:

• £5,000 from Jessica’s parents
• A £10,000 bank loan
• Jessica’s own £5,000 savings

Even with this combined £20,000, there’s still a £30,000 shortfall.

Their mortgage adviser suggests equity release. Based on the youngest applicant’s age (59) and a property value of £300,000, Mike and Judy could release up to £84,000.

This would:

• Fully fund Jessica’s deposit
• Leave at least £34,000 available for future retirement needs via drawdown

Around one in five equity release customers use some of their funds to support family members. With features like inheritance protection and voluntary repayments, Mike and Judy can still protect value for Jessica while maintaining flexibility.

For advisers, this scenario can also create multiple opportunities, supporting both the equity release referral and the child’s mortgage application.

Funding a House Purchase in Later Life

Later life lending can also support lifestyle changes, especially when family is involved.

Jack and Paula (both 64) want to move closer to their grandchildren in retirement. They’ve found a new home priced at £500,000, just a few roads away from their son.

Their available funds include:

• £12,000 in savings
• £25,000 from the tax-free portion of their pensions
• £380,000 from selling their current home

Even after using all of this, they’re still £83,000 short.

They don’t want to drain their pension pots further and aren’t eligible for a loan of that size. Through equity release, they could access up to £176,250, comfortably covering the shortfall.

This would allow them to:

• Purchase the new home
• Avoid over-reliance on pension income
• Retain up to £68,250, or still have £10,560 left even if they don’t use their pensions at all

Once the purchase completes, the equity release loan is secured against the new property. With voluntary repayments and inheritance protection, Jack and Paula retain control and flexibility throughout retirement.

The Opportunity in Your Existing Client Bank

You don’t need to look far to find clients who could benefit from later life lending conversations. With over-55 debt projected to reach £402bn by 2032 and property wealth at an all-time high, many of these scenarios will already exist within your client bank. By offering broader later life lending solutions, you can provide better outcomes for clients while unlocking new value from existing relationships.

A Simple Way to Generate Valuable Income

Partnering with us is straightforward. To make a referral, all we need is your client’s name, age and contact details. That’s it.

You’ll be helping clients explore alternative lending solutions – something actively encouraged by the FCA under Consumer Duty, while also generating a valuable income stream for your business.

In 2025, the average referral payment was £1,600 per completed case.

Sometimes, the biggest opportunities are already sitting in your client bank, they just need the right conversation.

Disclaimer

Figures correct as of February 2026. It’s important to note that while release worked well for these clients, it will not be suitable for everyone. A thorough assessment of needs, alternatives, and long-term implications is essential in every case to ensure clients receive the advice that truly fits their circumstances.