Why today’s lifetime mortgages deserve a place in your client conversations
For many people, the term equity release still carries outdated perceptions. This often stems from past products that lacked the flexibility and safeguards available today. Our Wealth and Wellbeing Research suggests that there’s still a gap between attitudes towards using housing wealth and lifetime mortgages specifically. 39% of UK adults said they would consider using their home as a source of income in retirement, yet only 6% of those would consider a lifetime mortgage product1.
Against this backdrop, many people are now reaching retirement with less guaranteed income than previous generations. In the UK, defined contribution pension assets are currently valued at £950 billion compared with £3.84 trillion of residential and buy-to-let property wealth held by those aged 60+2. This contrast highlights the potential role housing wealth could play alongside pensions in helping clients fund later life. In fact, by 2050, 51% of households aged 60+ could benefit from accessing their household wealth in retirement through later life lending, unlocking £23 billion each year (in 2025 prices)3.
We can also see that the retirement landscape is evolving. Changes to the Inheritance Tax treatment of pensions from April 20274 could add further consideration for advisers and their clients. With unspent pension savings potentially bringing some estates above the Inheritance Tax threshold, clients may need to think differently about how they use their assets to fund retirement and plan for the wealth they leave behind.
This changing retirement landscape also highlights the growing role that housing wealth could play alongside more traditional sources of retirement income. With the FCA recognising the potential for later life lending to become a “fourth pillar” of retirement5, advisers have an opportunity to take a more holistic view of clients’ wealth, considering both pension and property assets when helping them plan for their financial goals.
How later life lending has evolved
While the role of housing wealth in retirement may be growing, perceptions of equity release have not always kept pace with how the market has changed.
Equity release has come a long way since the 1960s. Early plans were relatively basic, involving homeowners selling their property and leasing it back while continuing to live there. Over time, concerns around property values and the risk of eviction reinforced the need for stronger safeguards and a more robust approach. This eventually led to the inception of lifetime mortgages and home reversion plans in the 1990s6.
Today, later life lending is subject to FCA regulation and industry safeguards, with client needs and suitability at its core. Modern lifetime mortgages offer greater flexibility and safeguards, including features such as early repayment options and the reassurance of a no negative equity guarantee. They can also help support a range of client needs in later life. At LV=, our most common reasons for borrowing include clearing outstanding debt, gifting to family and friends, and funding home improvements7.
How can advisers help shift client perceptions?
For advisers, this evolution provides an opportunity to help reshape how later life lending is understood and discussed with clients. Using clear, modern language, explaining how products and safeguards have evolved, and addressing concerns openly can all help challenge outdated perceptions.
It’s also important to reinforce the role that advice and legal checks play in the process, while positioning later life lending as one of several options that may be considered depending on a client’s individual circumstances and objectives.
By focusing on education and setting clear expectations from the outset, advisers can help clients feel more informed and confident when considering whether later life lending could be right for them.
Supporting responsible later life lending
At LV=, we believe changing perceptions goes hand in hand with ensuring later life lending is considered responsibly. That’s why we place long-term suitability at the heart of our approach, carefully considering both the customer’s circumstances and the property being used as security. Through our underwriting approach, pre-application support and focus on education, we aim to help advisers identify potential issues early and place cases with confidence. This is reflected in our post offer decline rate of 0.8% (year to date) across submitted applications for our lifetime mortgage range8.
Later life lending won’t be right for everyone. With a lifetime mortgage, interest may be added to the loan and compound over time, increasing the amount owed. The loan is secured against the client’s home, and it may reduce the value of their estate and affect their entitlement to means-tested benefits. So, both the potential benefits and long-term implications must be carefully considered. However, where it is appropriate, it can provide a way for customers to use their housing wealth to support their wider financial plans and choices in later life.
By combining robust safeguards with informed advice and a focus on individual needs, we can help ensure later life lending is not only better understood but considered responsibly as part of the retirement planning conversation.
To learn more about our lifetime mortgage range, visit LVadviser.com.
Sources:
1 LV= Wealth and Wellbeing Research Programme, Edition 22 – May 2026
2 Over-60s residential property wealth three times greater than DC pension market value - Pensions Age Magazine
3 How can housing wealth bridge the later life funding gap – Fairer Finance, May 2025
4 Technical note: Inheritance Tax on pensions - GOV.UK
5 Financial Conduct Authority, Later life lending: building the fourth retirement pillar
6 Then vs Now – How equity release has changed over time - LV=
7 LV= Reason for loan data – September 2026
8 LV= Underwriting data – September 2026
This article was provided by LV=
