2025
9
UK Equity Release and Later Life Mortgages Market Report 2025
2025-11-10T12:03:30+00:00
REPC8758847_35D4_4B72_B446_20119DBAAB5C
2195
188466
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Report
en_GB
The UK equity release market grew considerably in terms of overall take-up over the past decade, despite a fall in sales in 2023 and 2024. Yet there is still potential…
UK
Retirement and Pensions
simple

UK Equity Release and Later Life Mortgages Market Report 2025

"Further improvements in product terms and flexibility will help providers capitalise on the significant interest shown in equity release by older homeowners."

Sarah Hitchcock, Associate Consultant – Financial Services

Sarah Hitchcock, Associate Consultant – Financial Services

Market Intelligence ReportsRetirement and PensionsUK

UK Equity Release Market – Trends and Insights

  • The UK equity release market grew considerably in terms of overall take-up over the past decade, despite a fall in sales in 2023 and 2024. Yet there is still potential for further expansion.
  • Around one in five homeowners aged 55+ are open to the possibility of getting a lifetime or retirement interest-only (RIO) mortgage in the future. With over-55s owning just over two thirds of the UK’s total housing wealth, this points to a large untapped market.
  • Providers have experienced a difficult few years, with lower sales volumes in 2023-24 compared to the record levels seen in 2021-22. However, the downward movement in interest rates has started to lift confidence. Loan-to-values also look more appealing to prospective customers than a year ago. Sales and customer enquiries have risen moderately in 2025, with higher lending levels across the year signalling the start of a recovery.
  • The longer-term prospects are also positive, with many among the younger age groups keen on using property wealth to boost their retirement income. Further innovation and regulatory support will help providers to capitalise on this opportunity, through greater flexibility and more competitive terms. This, along with rising consumer awareness and acceptance of equity release as a viable way of supporting people in later life, will drive future take-up.

This Report Looks at the Following Areas:

  • Current and projected size of the UK equity release market, alongside the current size of the broader later life mortgage market, by value of new lending.
  • Expected and actual sources of financial support, and main priorities, in retirement and later life, according to UK adults aged 45+.
  • Ownership of, and interest in, lifetime and retirement mortgages.
  • The main pros and cons of lifetime mortgages, according to UK over-45s.
  • Attitudes towards, and understanding of, later life mortgages.

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  1. EXECUTIVE SUMMARY

    • Opportunities for the later life mortgage market
    • Leaving an inheritance is not a priority for most over-55s
    • Position equity release as an option for those who want to live debt-free in retirement
    • Full product flexibility will improve the product’s appeal
    • Market dynamics and outlook
    • Market size & forecast
    • Market predictions
    • Pace of recovery expected to increase from 2028
    • Graph 1: forecast of total equity release lending, 2019-30
    • Five companies were responsible for over 80% of new lending in 2024
    • Graph 2: estimated market share of the top five providers of equity release, by value of new lending*, 2024
    • What consumers want and why
    • One in six adults aged 45+ will use property assets to support them in later life
    • Graph 3: expected or actual sources of income and financial support in retirement/later life, 2025
    • Only around a quarter of over-45s prioritise leaving an inheritance
    • The market for later life mortgages offers room for further expansion
    • Product flexibility is as important as the no negative equity guarantee
    • Interest building up quickly is the top concern
    • Significant interest in using equity release as an IHT planning tool
    • Graph 4: agreement with statements about later life mortgages, 2025
    • Innovation and marketing
    • Providers are focused on making products more flexible and broader in scope

  2. MARKET DYNAMICS

    • Market size
    • Total equity release lending starts to recover
    • Graph 5: total value of equity release lending, 2019-25
    • New plan sales fell further in 2024
    • Graph 6: volume of new equity release sales, by type, 2019-24
    • Market forecast
    • Solid recovery expected
    • Graph 7: forecast of total equity release lending, 2019-30
    • Prospects for new business are set to improve
    • Market segmentation
    • Returning drawdown customers represent the largest share of recent activity
    • Graph 8: share of total equity release sales, by type, 2019-24
    • Many customers choose a phased approach to equity release
    • Graph 9: share of new equity release plans*, by product type, 2019-24
    • Loan sizes fluctuate with changing market conditions
    • Graph 10: average lifetime mortgage lump sum versus initial drawdown amount, Q3 2020-Q2 2025
    • Drawdown customers release a greater amount in reserve than a year ago
    • Graph 11: average lifetime mortgage lump sum versus drawdown (initial + reserve) amount, Q1 2024-Q2 2025
    • Market share
    • Just Group was the only provider out of the top five to report growth in 2024
    • Aviva and more2life are the largest providers of lifetime mortgages, by balances
    • Later life lending in context
    • Older borrowers account for a fifth of buy-to-let lending
    • Several equity release providers offer RIO mortgage as an alternative solution
    • RIO mortgages are a niche product
    • Graph 12: size of the equity release market versus the RIO mortgage market, 2024
    • Both types of later life mortgage are set for growth
    • Market drivers
    • Over-45s are projected to account for just over half of the UK population by 2055
    • Graph 13: projected size of UK population, by age group, 2025-75
    • Most over-65s own their home outright
    • Graph 14: housing tenure by age group, 2025
    • Strong house price inflation helps drive interest in equity release
    • Graph 15: average UK house price, August 2013-July 2025
    • Above-target inflation remains a market risk
    • Rising gilt rates push up interest rates on new lifetime mortgages
    • Regulatory developments
    • FCA wants to improve the quality of lifetime mortgage advice
    • ERC and AMI issue joint statement to address the challenges facing the industry

  3. WHAT CONSUMERS WANT AND WHY

    • Sources of income and financial support in later life
    • One in four aged 45+ do not expect to rely on the State Pension
    • Graph 16: actual or expected sources of income/financial support used in retirement/later life, 2025
    • Nearly a fifth of over-45s plan to draw on property wealth in retirement
    • Under-55s are more sceptical of pensions supporting them in retirement
    • Graph 17: actual or expected sources of income/financial support used in retirement/later life, by age, 2025
    • Growing trend for people to tap into equity earlier
    • Financial priorities in later life
    • To maintain a good standard of living is the top priority
    • Graph 18: main financial priorities in retirement/later life, 2025
    • Homeowners are more likely to want to leave an inheritance
    • Graph 19: main financial priorities in retirement/later life, by housing situation, 2025
    • Living debt-free is a goal for many over-45s
    • Product flexibility and portability is essential
    • Ownership and future consideration of later life mortgages
    • Almost a fifth of over-55s are open to considering a later life mortgage
    • Graph 20: current usage and future consideration of later life mortgages, 2025
    • Those aged 45-54 show the greatest level of interest in equity release
    • Graph 21: current usage and future consideration of lifetime mortgages, by age, 2025
    • PTLM bridges the gap between RIO and ordinary lifetime mortgages
    • Graph 22: current usage and future consideration of PTLM, 2025
    • RIO mortgages have a younger age profile than lifetime mortgages
    • Graph 23: current usage and future consideration of retirement interest-only mortgages, by age, 2025
    • Perceived pros and cons of equity release
    • Retaining ownership of the property is a key selling point of equity release
    • Graph 24: products features/benefits that are appealing, 2025
    • Flexibility to make interest payments appeals to many
    • One in five are keen on inheritance protection
    • Nearly two fifths are concerned about the rapid build-up of interest
    • Graph 25: concerns about lifetime mortgages, 2025
    • Costs and charges also weigh heavily on people’s minds
    • Attitudes towards equity release and later life mortgages
    • Most older homeowners have never looked into equity release
    • Graph 26: agreement with statements about equity release and later life mortgages, 2025
    • Consumer confusion is a key barrier
    • IHT mitigation could be a key driver in future sales
    • Graph 27: agreement with statements about equity release and later life mortgages among prospective customers, 2025
    • Equity release is an emotional transaction as much as a financial one

  4. INNOVATION AND MARKETING TRENDS

    • Competitive strategies and product development
    • Just Group set to get a new owner
    • Key Group integrates Standard Life Home Finance into more2life business
    • more2life launches a series of products with increased flexibility and broader appeal
    • Royal London improves product flexibility
    • Several providers reduce the length of ERC terms
    • Aviva’s Lifestyle Max offering
    • Advertising and marketing activity
    • Providers cut back on advertising
    • Graph 28: advertising expenditure on equity release versus other mortgage products, 2021-25

  5. APPENDIX

    • Supplementary data
    • Adspend by media type
    • Adspend by largest advertisers
    • Market forecast data and methodology
    • Market size: underlying data
    • Market forecast: underlying data
    • Market forecast and prediction intervals
    • Forecast methodology
    • Report scope and definitions
    • Market definition
    • Product definitions
    • Abbreviations and terms
    • Equity Release Council data
    • Consumer research methodology
    • Nielsen Ad Intel coverage
    • Other sources

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