Last updated: 7 July 2017
At a glance
- In previous generations, people did not take out mortgages that extended into retirement, but in the current era of much less well defined life stages, with people entering into the mortgage market later and mortgage terms extending, retirement borrowing is increasing.
- This, together with changes to rules on access to pension savings coming into effect in April 2015, allowing much greater freedom to draw from existing pension funds, has prompted the mortgage industry to comprehensively address the issue of retirement borrowing.
- In light of this, the CML created a task-force and working group in March 2015 to review the issues raised by lending into retirement and the practical considerations that the mortgage industry needs to address. The focus of the working group was to be on both lending into retirement and lending in retirement. We have produced a list of member organisations involved in CML retirement borrowing project (pdf).
- We are pleased to present the findings of the working group in the following report Retirement Borrowing: reality, perceptions, projections and potential (pdf).
- A key part of our 2016 annual conference was focused on retirement borrowing, with the annual 'Rising Stars' challenge posing the question: "Older borrowers would be better served by the mortgage industry if...". Read the full article by Rising Stars 2016 winner Kasar Ayub, outlining his idea of sub-dividing properties.
- On 26 June 2017 we published a research report Later life borrowing - New mindsets: Old silos.
We see lending into retirement and related issues as crucial for the mortgage industry and consumers, both in the short and longer term.
We understand that lenders want to help consumers meet their aspirations, but they must continue to lend responsibly and within regulatory requirements and legislation and borrowing into retirement must be considered in the wider social context of an ageing society and changing housing needs.
Affordability remains key, whatever the age of the borrower.
Why this is important for lenders
Lending into retirement is receiving much political, regulatory and media interest, as it affects an increasing number of consumers. Two recent major reforms - the mortgage market review and the relaxation of rules on access to pension pots – have pushed it even further up the policy agenda.