The final quarter of 2025 saw 41,100 new loans advanced to older borrowers, a 5.1% jump on the same quarter last year, according to UK Finance.

Figures from the banking trade body revealed that the value of this lending was £6.8bn, a total up 20.5% compared with the same quarter a year previously.

UK Finance’s latest data for the later life lending market also showed there were 5,700 new lifetime mortgages advanced in Q4 2025, unchanged from the same quarter a year earlier but down 5.6% compared to Q3. The value of this lending totalled £510m.

There were also 388 retirement interest only mortgages advanced in Q4, a level up by 13.1% year-on-year. The value of this lending was £36m, a 2.9% increase compared with the same quarter a year previously.

Residential later life loans in Q4 represented 8.02% of all residential loans, while buy-to-let (BTL) later life loans represented 21.4% per cent of all BTL loans.

Chief sales and marketing officer at Phoebus Software, Richard Pike, commented that the rise in later life lending announced by UK Finance “reflects the growing importance” of the sector within the wider mortgage market.

Pike added: “With people living longer and facing more complex financial needs in later life, these products provide a crucial solution for those looking to unlock property wealth. This is no longer a niche area, and the Financial Conduct Authority has set out plans for a focused later life lending market study.

“While some mainstream lenders are starting to offer later life products, the sector’s growth is being led by specialist lenders, and we’re hearing from our account servicing clients that they expect the market to continue to grow in 2026.”

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