The Intermediary – July 2025 - Flipbook - Page 7
This redefinition of retirement began in
earnest with the abolition of the default
retirement age.
Jim Boyd, CEO of the Equity Release Council,
explains: “In 2011, the Government changed
legislation to bring an end to the default
Karina Hutchins, principal of mortgage policy
at UK Finance, adds that increasing numbers of
people now “access later life lending at younger
ages, with some providers reporting a reduction
in average customer age from 70 to 67 this year.”
As a result of this shift, and increased need for
retirement age which meant that people were
work in order to pay off mortgage debt later into
no longer forced to retire at a specific age. This
life, the market has adjusted accordingly.
has changed how retirement is viewed and gives
Boyd notes a steady stream of changes from
people the freedom to decide how and when they
lenders, which are now introducing new products
want to retire.”
to “allow for people working longer.”
Nevertheless, while working longer may
He says: “For some, their plans to work into
offer financial benefits, such as paying down
what was traditional retirement fall apart, and
mortgages or growing pension pots, it also
they need to consider how they repay the capital.”
comes with challenges, including health, caring
responsibilities, and dwindling employment
opportunities in later life.
According to Les Pick, sales director at
This reality is particularly acute for those
impacted by divorce, redundancy, or historical
interest-only mortgages with no repayment
vehicle – scenarios that are becoming more
LiveMore, retirement was once viewed as “a
common among borrowers in their fifties and
distinct line in the sand […] marked by complete
early sixties.
withdrawal from the workforce and a reliance on
pension savings.”
However, today’s homeowners – many of
whom have benefited from house price growth in
Mike Batty, product and proposition director
at Legal & General, observes that “the cost of
entry to the UK property market has significantly
increased, pushing many to consider
recent decades – are navigating a more complex
homeownership later in life.” He points to recent
environment marked by the end of defined
Legal & General data, which shows an 80% rise
benefit (DB) pensions, inflationary pressures, and
in mortgage adviser searches for first-time buyers
social factors like divorce. As a result, Pick says,
aged 56 to 65 in Q1 2025, with a further 23%
many are “looking at phased retirement, and
increase among those over 65.
often leverage against property wealth to enhance
their lifestyle and retire in a timely fashion.”
Paul Carter, CEO at Pure Retirement, sees this
shift as part of a broader social evolution.
He says: “Modern retirees are seeking to make
Batty continues: “For many who are getting
on the property ladder later in life, carrying a
mortgage or unsecured debt into retirement will
be a reality.”
With many facing stretched budgets, longer
the most of their later years, and are probably
financial commitments, and later starts on the
the most active generation in that regard – the
property ladder, it is clear that the 50 to 65 age
passive ‘slippers and rocking chair’ retirement is
group has become a growing and increasingly
definitely a thing of the past.”
diverse presence in the lending pipeline.
As attitudes toward later life evolve, so too
Pick says: “Homeowners over the age of 50 have
has the role of borrowing. Once stigmatised
benefitted from house price inflation, but the
as a failure of planning, Carter says, borrowing
complexities of modern-day life have often taken
in later life is now “a viable and accepted
their toll financially.”
tool, making use of existing assets, to live the
retirement that people want or aspire to.”
Younger borrowers
The new normal
A growing number of homeowners are carrying
debt – both mortgage and unsecured – well
Once the ‘twilight end’ of the mortgage market,
beyond the traditional retirement threshold. This
later life lending now often begins far earlier
trend is driven by a combination of structural
than expected. Increasingly, borrowers in
and generational shifts, including rising living
their early fifties are engaging with products
costs and a broader cultural comfort with debt
traditionally reserved for retirees – a trend fuelled
among emerging retirees.
by rising property prices, longer mortgage terms,
and evolving life circumstances.
Boyd explains: “According to the FCA, the
Boyd says: “There are a variety of different
reasons driving this trend, but arguably
affordability is at the heart of it. People are
average first-time buyer is 34, which means
struggling to get on the housing ladder, and
that even if they take out a 30-year mortgage,
when they do may need a longer term in order
then they will be 64 years old when they repay
to afford the repayments.”
it.” That is assuming no further borrowing or
remortgaging along the way.
Beyond individual circumstances, broader
demographic trends are at play. Pick notes that
p
July 2025 | The Intermediary
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