Later-life lending is on the rise – but with so few qualified advisors, where does that leave older borrowers?
Despite all the talk of progress, the mortgage industry is still stuck in the past—shutting out borrowers over 55 with outdated rules and limited options.
The UK’s ageing population is reshaping the housing market, but older borrowers still face major hurdles. As younger generations leave for work and retirees relocate, demand for later-life lending is rising.
Yet, only 4% of over-50s believe they could secure a mortgage, according to LiveMore. Of the UK’s 22,000 mortgage advisors, just 7,000 are certified in later-life lending, and even fewer specialize in it. Who will step up to serve this forgotten demographic?
“We tend to get a lot of people moving to the islands or maybe deciding to retire to the islands. For the younger generations—people looking for their first home—it makes it very, very difficult,” said John MacAskill, a financial services veteran.
As demand rises, inquiries about equity release have surged, with lifetime mortgages becoming a popular option. But MacAskill was clear: these aren’t a one-size-fits-all solution.
“Year on year, we get more inquiries for equity release. The type of equity release that we offer is what's called a lifetime mortgage. Now, obviously, we do get enquiries on that, but it's not always the answer for folks,” he said. “When we get enquiries for retirement mortgages or retirement lending, we look at lifetime mortgages, retirement interest-only mortgages, conventional mortgages, and any other possible source of raising funds available to our clients.”
With conventional mortgages becoming less accessible for older borrowers, the market has responded with hybrid solutions that offer flexibility, including voluntary repayment options.
“There’s a lot of hybrid products now, lending products that are geared towards people facing their retirement today,” MacAskill said. “Lenders have become far more flexible in approach. The products again are getting amended, tweaked all the time, year on year, there are new options available.”
Affordability: the biggest hurdle for older borrowers
For many borrowers approaching retirement, affordability is the biggest challenge. Traditional mortgage terms require substantial monthly payments, which become unsustainable on a reduced income.
“The most common issue with folks looking to borrow later in life—whether it’s in retirement or approaching retirement—is affordability,” MacAskill said. “With your conventional mortgages, you’re working with a reduced mortgage term, which obviously means higher mortgage payments. Affordability then becomes an issue, especially when somebody is within 10 years of retirement.”
Joint applications add another layer of complexity. The loss of one income can throw financial stability into question.
“When you’ve got a joint application and maybe one income has stopped, it’s an issue trying to demonstrate long-term affordability,” MacAskill said.
Lifetime mortgages offer a potential alternative, allowing voluntary interest payments rather than mandatory monthly obligations. Borrowers use these solutions for everything from home improvements to clearing debts or even advancing an inheritance to their families.
“People wanting to advance an inheritance to maybe children or grandchildren—so they can see them benefit from it while they’re at an age where it will help them more—are increasingly using later life lending solutions,” he said.
The need for qualified advisors in later-life lending
Despite the rising demand, Scotland has a shortage of qualified advisers in equity release.
“In Scotland, as in England and Wales, there’s only a low percentage of advisers who are qualified in equity release. Historically, there hasn’t been an awful lot of advisers qualified,” MacAskill said. “I get a lot of referrals from other brokers and solicitors where clients have asked them about equity release, and they refer them on to me.”
Given the complexity of later life lending, experience is crucial.
“Personally, I would say anybody coming into the industry needs a good few years under their belt in standard mortgage advice before moving into specialist areas like equity release,” MacAskill said. “Obviously, you’re dealing with potentially vulnerable clients all the time. There are so many things you have to look at, whether it’s going to affect somebody’s benefits, inheritance or the overall erosion of equity in the property.”
The process itself is more time-consuming, but MacAskill believes it’s essential to ensure clients make fully informed decisions.
“You’ve got to take a lot more time with clients. I would say at least two face-to-face meetings. I prefer going out to speak to people face-to-face, whether it’s on the island here or travelling to mainland Scotland,” he said. “It’s easier to explain things, and every household is different. Every applicant is different. Some need more time than others.”
A growing sector with no signs of slowing
MacAskill’s firm, Highlands and Islands Retirement Mortgage Solutions, has become a go-to resource in later life lending, with 75% of his work now focused on this area.
Looking ahead, he expects demand for later life lending to keep climbing as financial attitudes shift and lenders evolve.
“Lenders are obviously aware that people’s attitudes to lending have changed a lot over the years. For whatever reason, people are a lot more comfortable borrowing in retirement today,” he said. “Sometimes it’s out of necessity, but in many cases, people just want to raise funds for discretionary spending or to help their families. I expect there to be a higher demand for later-life lending.”
John MacAskill, t/a Highlands & Islands Retirement Mortgage Solutions is an Appointed Representative of HL Partnership Ltd, which is authorized and regulated by the Financial Conduct Authority.
