Lending to borrowers aged 55 and over increased by more than 20% year on year to £6.2bn in the second quarter. However, UK Finance said last year's figure was depressed because of the stamp duty deadline.
The industry body reported 37,300 new loans to older borrowers in Q2, up 13.4% year on year. The total value of this lending was £6.2bn, which is 20.5% higher than the same quarter last year.
But UK Finance noted that the percentage jump is inflated because of a low figure in Q2 2025, when lending fell after the rush to beat stamp duty changes that April.
The figures show 5,730 new lifetime mortgages worth £490m were advanced in Q2. The number of loans was 1.7% lower year on year, but 8% higher than in Q1.
There were 323 retirement interest-only mortgages advanced in Q2, up 5.9% year on year, worth a total of £31m. That was 24% more than the same quarter in 2025.
Air chief executive Will Hale said: “The thing that leaps off the page in this latest lending data is the stark gap between the number of over-55s taking out a residential mortgage and those taking out a lifetime mortgage.
“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.
“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.”
More2life chief executive Dave Harris said: “Today’s later life lending figures from UK Finance reinforce our call to make it mandatory to signpost all later life lending options, including equity release, to all later life borrowers.
“Against a backdrop of 15 million people in the UK under-saving for retirement, [the number of people taking a lifetime mortgage] should be far higher than it is.”
Equity Release Council chief executive Jim Boyd added: “Today’s figures show the later life lending market continuing to evolve as housing wealth becomes an increasingly important part of retirement planning.
“The FCA’s recognition of later life lending as a potential fourth pillar of retirement funding, alongside pensions, savings and investments, reflects the reality that people are increasingly looking across a wider range of assets to support their financial needs in later life.”
