Later life lending lifeline for economically inactive over-50s

22 July 2025

• Up to a half of 50 to 64-year-olds not in work are disabled, ill or injured, data shows
• Nearly one in four men and one in three women aged 50 to 64 are economically inactive

22 July 2025: Later life lending is providing a financial lifeline for the rising number of over-50s who are unable to work but are too young to access their state pensions, Key Later Life Finance, the UK’s leading equity release adviser, says.

Data shows the employment rate for people aged 50 to 64 has edged up to 70.9% but is still below its pre-pandemic record high of 72.5%. The average age for leaving the workforce is 65.7 for men and 64.5 for women. The employment rate varies across the country dropping to 60.3% in Wales.

Key Later Life Finance analysis shows however that across the UK 23.2% of men and 31.3% of women aged 50 to 64 are economically inactive with nearly half (44.9%) unable to work due to disability, illness or injury.

Property wealth is proving crucial for those people to enable them to maintain standard of living and bridge any income gaps before they can access their state, and private, pensions, Key Later Life Finance says.

That growing demand from younger borrowers is reflected in the most recent Equity Release Council figures shows around half (48%) of later life lending borrowers are aged 55 to 60, and more than 73% are aged 55 to 65.

Industry data shows people aged 50 to 64 own housing equity wealth of. £2.183 trillion which can help provide a safety net when they face unexpected financial shocks such as those caused by ill-health, Key Later Life Finance says.

Will Hale, CEO Key Advice, said:

“Later life lending products are already playing a major role in helping with retirement planning by enabling fit and healthy over-50s to manage mortgage debt in a flexible and efficient way.

“The rising numbers of people who are unable to work through sickness, injury or disability in their 50s and early 60s need to look at a wide range of financial options, including housing equity, to bridge the gap until other sources of retirement income become available to them – for example the state pension.

“Many lifetime mortgages that allow some or all of the interest to be paid are proving to be a solution for many in that age group and are designed to evolve with borrowers as they move into retirement. Products now typically have fixed early repayment charges (ERCs) or indeed no ERCs at all.

“Customers can choose to re-pay a loan in full in the event that sufficient capital becomes available, potentially as the result of an inheritance, or eventually transition into a full roll-up lifetime mortgage with a fixed interest rate for life and certainty of tenure once any mandatory payment terms have been met. There are options which incentivise customers to manage their cost of borrowing by reducing the interest rate while regular repayments are being made.

“However, everyone’s circumstances are different and it is important that these products, which do have some downside risks, are accompanied by specialist advice. ”