Why Later Life Lending Needs to Become Part of Every Retirement Conversation

The FCA has made its position clear, in a recent speech by Emad Aladhal, director of retail banking: later life lending has the potential to become the UK’s “fourth pillar” of retirement funding. The question for mortgage brokers and financial advisers isn’t whether the market will evolve – it’s whether they’ll be ready to lead the conversation.

For firms that already support clients with retirement planning, wealth management or mortgages, this represents a significant opportunity to deliver greater value while helping clients achieve better outcomes.

A Changing Retirement Landscape

For decades, retirement planning has centred around three core pillars; state pension, workplace pensions and personal pensions.

Now, the Financial Conduct Authority is encouraging the industry to think more broadly. As property wealth continues to grow, housing equity is becoming an increasingly important financial asset that deserves a place alongside more traditional retirement planning.

The reality is simple: many clients are asset-rich but income-poor.

While they’ve successfully built significant equity in their homes, they often don’t consider how that wealth could support their retirement goals.

The Opportunity is Too Significant to Ignore

The statistics behind the FCA’s speech paint a compelling picture.

The Pensions Commission estimates that 15 million working-age adults are unlikely to achieve the retirement income they aspire to. At the same time, Fairer Finance research suggests that by 2040, more than half (51%) of households aged over 60 could benefit from accessing housing wealth, representing around £4.3 trillion of property equity.

Yet despite this enormous potential, later life lending remains a relatively small part of the mortgage market.

FCA data shows that of almost 330,000 mortgages completed by borrowers aged over 55 in 2025, only around 9% were lifetime mortgages or Retirement Interest Only (RIO) products.

This suggests that many consumers who could benefit from exploring later life lending simply aren’t having those conversations.

Why Advisers Are Uniquely Positioned

One of the strongest messages from the FCA is that later life lending shouldn’t be viewed as a product of last resort.

Instead, it should become part of holistic financial planning.

That’s where advisers and brokers can make the greatest difference.

Rather than waiting until clients face financial pressure, advisers can introduce housing wealth as one of several options during regular retirement reviews.

For some clients, later life lending may help:

• Supplement retirement income
• Fund home improvements to support independent living
• Cover care costs
• Help children or grandchildren financially
• Improve inheritance tax planning
• Manage estates more effectively

Importantly, it won’t be the right solution for everyone- but clients deserve to understand the options available to them before they need them.

Breaking Down the Advice Silos

The FCA also highlighted a challenge many advisers already recognise.

Too often, mortgage advice, pension advice, investment planning and estate planning operate separately.

Clients don’t think in product categories – they think about achieving financial security.

This creates an opportunity for firms to collaborate more effectively across disciplines, ensuring clients receive joined-up advice that considers every aspect of their financial position.

For mortgage brokers, partnering with financial advisers can unlock valuable conversations.

For financial advisers, working alongside later life lending specialists ensures clients receive informed guidance on products that may not sit within their own permissions or expertise.

Ultimately, better collaboration leads to better consumer outcomes.

Trust Will be the Key to Market Growth

Although awareness of equity release has improved considerably over recent years, some consumers still associate later life lending with outdated perceptions.

Today’s market is very different.

Modern products offer greater flexibility, enhanced consumer protections and a wider range of features designed to meet diverse retirement needs.

However, building confidence requires more than product innovation.

It requires advisers who are confident discussing housing wealth as part of a broader financial planning conversation, supported by clear communication and appropriate specialist advice where required.

As the FCA noted, trust will be fundamental if the sector is to fulfil its potential.

What This Means for Advisers Today

The regulator has already announced further work in this area, including consultations around Retirement Interest Only affordability, workshops exploring more holistic advice, and an ongoing market study into later life lending.

While regulation continues to evolve, advisers don’t need to wait.

Now is the time to:

• Review how later life lending fits within your client proposition.
• Identify clients approaching retirement who may benefit from broader conversations.
• Build relationships with trusted later life lending specialists.
• Ensure your advice process considers housing wealth alongside pensions, investments and other assets.

Looking Ahead

The UK’s ageing population, rising property wealth and retirement funding challenges mean later life lending is unlikely to remain a niche market for much longer.

For advisers and brokers, the opportunity extends beyond recommending products.

It’s about helping clients see the full picture of their financial future.

Those who embrace more holistic retirement conversations today will be well placed to meet growing client demand tomorrow.

How Key Partnerships Can Help

At Key Partnerships, we work alongside mortgage brokers and financial advisers to make later life lending an integral part of holistic financial planning. Whether you want to refer clients, develop your expertise or build a comprehensive later life proposition, our specialists provide the support, technical knowledge and market insight you need to deliver confident, compliant advice and achieve better outcomes for your clients.