Our retirements are getting longer. Among those finishing work in 2026, many people may live for another twenty or even thirty years.
The prospect of having many years to spend relaxing, spending time with family and doing the things you love is exciting, but it also comes with challenges – especially financial ones.
As well as retirements stretching out for longer, the cost of everyday necessities such as food and household bills has risen in recent years, which may impact retirement budgets.
In addition, many people may find themselves retiring with workplace pensions that are different from those enjoyed by previous generations.
This means that many pensioners need to find a way to make their money go further, so they can achieve the retirement they really want.
‘For many people planning to retire in 2026, the biggest challenge is making their income stretch further,’ says Sophie Walsh, head of equity release advice at Royal London Equity Release Advisers.
‘We’re seeing longer retirements, rising everyday costs and pensions that aren’t always keeping pace. That’s prompting a lot of homeowners to take a fresh look at their finances.’
Make your money go further: People planning to retire in 2026 are seeking ways to increase their budgets amid rising costs – and their home could provide part of the answer
One of the options homeowners may consider to boost their income in retirement is equity release.
The most common type of equity release is a lifetime mortgage, which allows UK homeowners aged 55 or over to access some of the value tied up in their home through a tax-free cash loan.
This does not usually need to be repaid until the last homeowner dies or enters long-term care.
Monthly repayments are optional, giving customers the choice to either make regular repayments to reduce the interest that is accrued over time, or to let the interest roll up, which will increase the amount owed and reduce the equity remaining in the property.
They retain 100 per cent ownership of the home.
People are far more open to the idea of unlocking some of the value in their home to support a more comfortable retirement, not as a last resort, but as part of a balanced financial plan
Sophie Walsh, Royal London Equity Release Advisers
‘A lot of people assume retirement planning is all about pensions and savings, but the home often plays a much bigger role than they realise,’ says Walsh.
‘We often meet clients who are asset rich but cash poor. They’ve worked hard to pay off their home, and now they want that wealth to actively support the lifestyle they’ve spent years planning for.’
Equity release lending is growing as those heading for retirement look for ways to supplement their pension income and cope with longer retirements and higher costs.
Figures from industry body the Equity Release Council show that total lending increased 4 per cent to £639m between July and September 2025, compared to the previous three months.
Royal London Equity Release Advisers’ Walsh says: ’The mindset around using property wealth has shifted massively in the last few years.
‘People are far more open to the idea of unlocking some of the value in their home to support a more comfortable retirement, not as a last resort, but as part of a balanced financial plan.’
Equity release is not right for everyone, however. The loan is repaid through the sale of the property after the last homeowner dies or enters long-term care, so may not be suitable for those who want to pass their home to their family.
Unlocking wealth: Equity release allows homeowners over the age of 55 to access some of the money that is tied up in their property through a tax-free cash loan
Other options for those who want to use their property wealth to help pay for retirement may include downsizing to release equity, or a retirement interest-only mortgage.
Because interest on the loan can roll up over time, those who have an equity release plan for a long period may find there is little or no equity left to pass on as an inheritance.
Plans from Equity Release Council members feature a no‑negative equity guarantee, which means the loan cannot exceed the value of the home it is secured on.
How are equity release customers protected?
This shield against negative equity is a key difference between many of the plans available today and those offered in the past.
‘One of the biggest misconceptions is that equity release is still the product it was 15 or 20 years ago where you would be at risk of losing ownership of your home,’ says Walsh.
‘Modern lifetime mortgages are far more flexible, better regulated and designed to give homeowners genuine control.’
The Equity Release Council has set five standards which lifetime mortgages offered by its members must meet.
As well as the no negative equity guarantee, they also include having an interest rate fixed for life, the right to move home subject to lender approval and being able to make voluntary, penalty-free repayments up to an agreed limit, subject to lending criteria.
‘These safeguards provide greater confidence for accessing property wealth,’ says Walsh.
If you are considering equity release, speaking to an adviser which covers the whole of the market, such as Royal London Equity Release Advisers, is crucial.
Expert: It’s important to consult a whole-of-market adviser when considering equity release
Whole‑of‑market advisers can offer customers a full range of lifetime mortgages, not just one from a limited panel of lenders. This means customers can explore different products that may be suitable for their needs.
Walsh says a good adviser will also take a full view of all the customer’s finances, and work out how they can meet their retirement goals.
‘At Royal London Equity Release Advisers, our advisers provide impartial guidance across the market,’ she says.
‘Choosing the right plan isn’t just about the interest rate or the amount you can release.
‘Whole-of-market advice helps you consider long-term flexibility, protection features, and how the plan fits with your broader retirement goals.’
How is equity release being used?
Royal London Equity Release Advisers says that, in the last year, one of the most popular reasons for taking a lifetime mortgage among its clients has been to pay off their existing mortgage.
This frees them from having to make repayments during retirement when their monthly budget may be smaller.
‘Removing these monthly payments could significantly improve someone’s financial outlook going into retirement,’ says Walsh.
Renovating their home is also a common motivation, including making it more energy efficient to cut down bills as they head into later life.
Walsh adds: ’We’re also seeing many clients use equity release to fund home improvements, everything from energy-efficiency upgrades to accessibility changes that help them stay in the home they love for longer.
‘One of the most rewarding parts of exploring equity release is hearing how a release of tax-free cash has helped someone feel more secure, whether that’s giving them breathing room with their income or supporting family members who need a financial boost.’
Equity release is a loan secured against your home. It will reduce the value of your estate and could affect your entitlement to means-tested benefits.