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Later Life

Later life mortgages offer numerous benefits for older homeowners in the UK, making them a valuable financial tool during retirement. One key advantage is the opportunity to unlock the equity built up in their homes over the years, providing access to tax-free cash. This extra liquidity can be used to supplement retirement income, enabling a more comfortable and financially secure lifestyle. Additionally, later life mortgages allow retirees to undertake home improvements or modifications, ensuring their properties are better suited to their changing needs and promoting the ability to age in place comfortably.

Consolidating existing debts into a later life mortgage can simplify financial management and reduce monthly outgoings. Moreover, these mortgages offer flexibility in how the released funds are used, from helping family members with deposits or education expenses to fulfilling long-held dreams like traveling the world or pursuing hobbies. For those with interest-only mortgages reaching maturity, later life mortgages provide a viable solution to repay outstanding balances without having to sell the property. Ultimately, these mortgages empower older homeowners to make the most of their accumulated wealth, enhance their quality of life, and maintain control over their financial future.

Please Note: Henden Financial Limited refers to carefully selected preferred partners for Later Life services and receive a referral fee.

Why would you consider later life lending?

There are many reasons why you may consider later life lending such as –

  • Being a viable alternative to using other assets

  • Supplementing retirement income

  • Holidays, cars and home improvements

  • Gifting money to family

  • Repaying an interest only mortgage

  • Restructuring other debt

Image by James Hose Jr

Is later life lending the right approach 

This is the most important question. Usually this comes down to considering some key points –

  • Your individual circumstances, plans and objectives

  • Considering alternative options (i.e. other assets, scaling down)

  • Loan amount required & purpose

  • Whether a Lump sum, drawdown or combination is required

  • Affordability, both now and in the future

  • Monthly payments, rolled up interest or a combination of both

Further considerations include 

  • Entitlement to state benefits

  • Involving beneficiaries

  • Credit status

  • Estate Planning

What are the options

If later life lending is the right approach, it’s common for people to assume that Equity Release is their only option. In reality, this isn’t the case.

There are 3 main options –

Home Desk
Kids Playing on the Couch

Can I use my pension to take out a mortgage?

Yes. Traditionally this was difficult as lenders wouldn’t consider mortgages over a certain age (i.e. 65). However, many will now accept pension income and some have no maximum age.

Furthermore, we work with lenders who can translate the value of a pension into an equivalent income to calculate the potential mortgage balance.

This means that you could take a mortgage without taking money from the pension. This can be beneficial for investment or tax purposes, however we recommend you speak with your Pension Adviser / Wealth Manager regarding this.

You can read more about using your pension to secure a mortgage here

Is it better to use a mortgage or my pension?

This depends on your individual circumstances. We can’t advise on pensions or investments. However, we can work with your Pension Adviser / Wealth Manager to make sure you get the best mortgage advice based on your individual circumstances.Whatever your reason, it’s important to seek advice from a specialist who can talk you through your options and help you make good informed choices.

At Henden Financial, we provide mortgage advice and work entirely on your behalf. If later life lending is right for you, we will make sure that you get the right solution for your needs.

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