The retirement lending market will double in size by 2027, research from equity release lender more 2 life in partnership with the Centre for Economics and Business Research has predicted.
Retirement lending – including secured and unsecured debt including mortgages, credit cards, overdrafts, loans, car finance, hire purchase, student loans, payday loans and store cards – is expected to double from £65bn in 2017 to £142bn in 2027.
Equity release lending eclipsed the £2bn mark for the first time last year.
Dave Harris, managing director at more 2 life, said: “Lending into retirement is becoming the new normal in the UK market, and demand among older borrowers is going to increase significantly over the next decade.
“The market is already responding to increased demand, with record levels of later life mainstream mortgage lending, more innovation in the equity release sector and a greater understanding of what older borrowers need in terms of products and advice.
“The demographics driving this demand are clear – we’re living longer, we’re buying houses later, more and more older people are working past the age of 65 and pensions freedoms have enabled people to access, and in some cases already spend, their retirement funds.
“All of these factors means that borrowing in retirement is going to become a much more prevalent feature of the UK financial services market.”
Legal & General acquired New Life Mortgages to enter the market in February 2015.
However Robert McCoy, senior product & business manager at TMA Mortgage Club, reckoned the industry needs more big names to grow further.
He said: “Nearly a fifth of the population is over 65 and this is only going to rise, so it’s no surprise retirement lending is set to more than double in the next 10 years.
“However, more needs to be done to service this market today. Although, we’re seeing some lenders introducing new products targeting the over 55’s, the lifetime mortgage market is still the domain of specialist lenders and lacks the introduction of a high street name.
“In any case, this is a huge growth sector in the mortgage market. It’s therefore crucial that advisers are up to speed on who is offering what, as well as advertising to clients that they can advise on mortgages for the over 55s.
“Retirement lending is ready to erupt and advisers to need to make sure they’re a part of it.”