The Intermediary – July 2025 - Flipbook - Page 8
"I still think equity release would have been easier, Captain"
“long gone are the years of ‘save to buy’,” as people
want more from life than previous generations.
Many consumers have grown up in an era of
not actually lifestyle improvements by proxy?”
easier access to credit, and are more accustomed
Not just necessity
to managing debt as a means to maintain
This marks a growing trend of older homeowners
lifestyle. This shift, compounded by rising
using borrowing to enhance quality of life – not
inflation and reduced DB pension provision,
merely to sustain it. Indeed, later life finance
means that many retirees now bear far more
is increasingly being used for comfort, and
responsibility for managing their own long-term
convenience – primarily for reasons such as
financial wellbeing.
home renovations or discretionary expenses.
Pick adds: “Many clients experience a shortfall
Hutchins notes:” The motivations behind
between pension income and day-to-day living
borrowing are changing. While previously it was
costs, especially after inflation or a partner's
often about paying off interest-only mortgages,
death.” This leads more people to look to
today’s borrowers are using these products to
property as a viable source of later life funding.
Around 15% of Pure Retirement’s new lifetime
mortgages in Q2 listed paying off a mortgage
as the primary reason for releasing funds, and
supplement retirement income, manage financial
transitions like divorce, improve their homes, or
consolidate debt.
"These shifts highlight the growing flexibility
Carter notes that many borrowers are entering
and relevance of later life lending in helping
retirement still repaying capital – or using
customers navigate complex personal and
lifetime or retirement interest-only (RIO)
financial needs.”
mortgages to manage legacy interest-only
arrangements.
However, he is careful not to reduce this to
Batty reports that “half of [L&G] customers use
their mortgage products for home improvements,
while a fifth (20%) opt to use their mortgage for
financial distress alone. He says: “There will
living expenses, and a further fifth (19%) use it to
doubtless be a cohort able to continue making
finance holidays in later life.”
the payments, but who just want the peace of
not having to think about it any more. If they
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repayment amount as disposable income, is that
He adds that these improvements are
often intended to enhance the experience of
take out a lifetime mortgage to clear the balance,
retirement at home – making it more enjoyable
and choose to repurpose their previous monthly
or simply more suited to changing needs.
The Intermediary | July 2025
