Later life lending figures from UK Finance show a 13.4% annual increase in the number of new loans advanced to borrowers aged 55 or over in Q2 2026.
The Later Life Lending Update Q2 2026 reveals 37,300 new loans were advanced to older borrowers in Q2, suggesting increasing numbers of people are recognising the role property wealth can play in funding their financial goals, rather than being treated as a last resort.
The total value of later life lending in Q2 2026 was £6.2 billion, up 20.5% compared with the same quarter a year previously. The 5,730 new lifetime mortgages advanced in Q2, with a value of £490 million, represented a fall of 1.7% against the same quarter a year earlier but an 8% increase compared to Q1.
Retirement interest-only mortgages advanced in Q2 have a value of £31 million and are up 5.9% year-on-year, to a total of 323. Residential later life loans represented 7.8% of all residential loans, while buy-to-let (BTL) later life loans accounted for 20.6% of all BTL loans.
Levi Culshaw, later life proposition manager at Mortgage Advice Bureau, said an increasing number of customers are approaching later life lending with a clear purpose in mind, “whether that’s boosting retirement income, supporting their family, or even ticking off that once-in-a-lifetime trip”.
He explained: This shift in mindset, alongside greater product flexibility and competitive rates, is likely behind the renewed momentum we’re seeing in the data.
“That said, growth in the market doesn’t mean the myths have gone away. Many people still rule out later life lending because they wrongly believe it means losing their home, leaving family with debt, or having no inheritance to pass on. The reality is far more flexible than that outdated reputation suggests, and speaking to a specialist adviser is the best way to understand what’s genuinely possible for your individual circumstances.”
Rachel Springall, finance expert at Moneyfacts, said the growth in retirement interest-only lending highlights the importance of having a broad range of options available to older borrowers.
“The FCA is examining the lifetime and RIO mortgage sector to consider whether change is needed to meet consumers’ changing needs, and with interim findings expected in Q4 2026, it will be interesting to see whether this leads to further innovation and choice for older borrowers”, she added.
For Will Hale, CEO of later-life lending platform Air, the “stark gap” between the number of over-55s taking out a residential mortgage and those taking out a lifetime mortgage is the stand-out aspect of the latest report.
“We have a long-standing advice gap in the UK when it comes to specialist later life lending and I’d argue that it is leading to poorer outcomes for many borrowers, particularly those in or preparing for retirement”, he said.
“Many of these customers still have an existing mortgage, carry other debt, have low levels of pension savings and face continued cost of living pressures. Taking a holistic view of needs and circumstances both now and into the future, alongside an understanding of the innovation we have seen in the later life lending product landscape, it can’t be right that the most suitable option for such a significant percentage of those over-55 is defaulting to a product transfer or a remortgage to another mainstream lender.
“Much of that is down to the fact that, as an industry, we are far too siloed: of the 35,000 UK advisers who hold mortgage permissions, only around 6,000 can also advise on equity release and we estimate that just 3,000 of these have recommended at least one lifetime mortgage in the last 12 months.
“It’s also the case that many borrowers, and advisers, for that matter, are unaware of the options available or still hold outdated views of equity release. The reality is that modern lifetime mortgages are incredibly flexible, allowing borrowers to service all, some or none of the interest, with rates that are fixed for life and with protections such as certainty of tenure and a no negative equity guarantee built in – some also come with zero early repayment charges. But if advisers aren’t even considering them as an option, borrowers will continue to be left in the dark and fail to access solutions that could be ideal for their circumstances.”
According to Dave Harris, CEO of equity release lender more2life, the figures lend weight to more2life’s call to signpost all later life lending options to borrowers.
“In Q2, just 5,730 borrowers took out a lifetime mortgage, with 37,300 loans in total to older borrowers over the quarter”, he said.
“Against a backdrop of 15 million people in the UK under-saving for retirement, that number should be far higher than it is.
“Lenders carry just as much responsibility here as advisers. Mainstream lenders sit at the heart of the customer journey too, and when a client reaches the end of a fixed rate, they should be pointing them towards the full range of options, not just a product transfer.”
