The number of people taking out mortgages in later life has increased, amid rising house prices, new research has shown.
UK Finance figures revealed that 33,840 people aged over 55 took out a mortgage in the third quarter of 2024, up 2% year on year, with 9,010 of those over the age of 65.
The value of lending was £5.2 billion, an increase of 9.7% on the same period of 2023.
The figures showed only 5,830 lifetime mortgages were advanced, a drop of 18.8% from last year.
Meanwhile, a total of 1,230 mortgages were taken out by retirees, an increase of 17.14% on 2023 figures, the data showed.
Clare Stinton, head of workplace saving analysis at Hargreaves Lansdown, said the expectation of a debt-free retirement is giving way to reality where many retirees face lingering mortgages so they need higher day-to-day income to manage their living costs. Stinton said this change in dynamics means pension saving must be higher.
She said: “Let’s not forget that owning a home in your thirties doesn’t shield you from life’s twist and turns, a divorce or being widowed in your forties could derail the best-made financial plans and force you to start over years later. Later life borrowers with mortgages extending into retirement must consider how they and their partner will manage payments if illness or worse occurs. Can each partner shoulder the mortgage alone? This critical question can shape how they draw pension income.”
Stinton said an interesting trend has been a large fall in lifetime mortgages over this period. This could be a sign
that cost of living pressures for many retirees have started to ease after a period of sustained high inflation.
“With first time buyers climbing the property ladder later than generations before, this trend looks like it could be here. Growing numbers could face mortgage payments or rent in retirement so planning to build a strong pension is now more vital than ever,” Stinton added.
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