A continued rise in later life lending is changing the way we need to think about retirement, says Hargreaves Lansdown.
The latest figures from UK Finance showed there were 33,130 new loans to borrowers over the age of 55 in the second quarter of 2025, a rise of 0.49% year-on-year.
The value of lending also rose by 3% to £5.2 billion compared with the same quarter the previous year.
A total of 4,780 residential mortgages totalling £570 million was to borrowers over 70, up 9.62% year-on-year.
Clare Stinton, head of workplace savings analysis at Hargreaves Lansdown, said taking mortgage debt into retirement raises income requirements and complicates planning.
“Later life lending is on the rise and it’s changing the way we need to think about retirement. New data shows that 33,130 new mortgages were taken out by over 55s between April and June. This is a slower pace than earlier in the year but still pushing borrowing deeper into retirement.”
Hargreaves Lansdown’s own data shows only 43% of households have enough pension savings for an adequate retirement income and the potential for paying mortgages into retirement makes this even more challenging.
“Some will be choosing to work longer or part-time, others may plan to use the tax-free cash from their pension to chip away at the debt. Either way, it’s a financial burden that previous generations rarely carried into retirement.
“This trend looks set to continue, with house costs sky-high, younger buyers are getting onto the property ladder later in life and often with longer mortgage terms. Paying a mortgage into our 60s, or beyond, could soon become the new normal. It makes an even stronger case for paying into your pension as early as possible, the more you put in now, the more time compound growth has to do the heavy lifting for you,” Stinton added.
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