Later-life financial options explained
Later-life financial options are the main ways UK homeowners aged 55+ can raise money or reduce costs in retirement: using savings or pensions, downsizing, a retirement interest-only mortgage, equity release, other later-life mortgages, family support, or help with care costs. Each affects your income, home and inheritance differently.
This page compares them side by side. It is general information, not financial advice.
Your main later-life options
Using savings or pension income
Drawing on savings or a defined contribution pension avoids new borrowing. The trade-off is less money for later, including for care, and pension withdrawals above the tax-free portion are taxed as income. You can usually access a personal pension from age 55, rising to 57 from April 2028. See pension options at 55 and whether to use savings before borrowing.
Downsizing
Moving somewhere smaller or cheaper can release money with no loan or interest, and may lower running costs. But stamp duty, agent and removal fees reduce the amount released, and leaving a familiar home can be hard. Our guide to downsizing covers the pros and cons.
Retirement interest-only mortgages
A retirement interest-only (RIO) mortgage is a loan secured on your home where you pay the interest monthly, so the debt does not grow. The loan is usually repaid when you die, move into long-term care or sell. The payments must be affordable from your retirement income, including if one partner dies.
Equity release
Equity release, usually a lifetime mortgage, lets homeowners aged 55+ access tax-free money from their home without monthly repayments. Interest is normally added to the loan and compounds, so the debt grows and reduces what you can leave. Early repayment charges may apply.
Other later-life mortgages
Some lenders offer standard repayment or interest-only mortgages that run into later life, with maximum ages that vary. Payments are often higher than a RIO mortgage if you repay capital. Our guide to later-life mortgages compares the types.
Family support
Some families help with a gift, a loan or by buying into the home. This avoids a lender, but may affect relationships, the helper's finances and sometimes tax or benefits. A solicitor can put any arrangement in writing; see also selling your home to family.
Help with care costs
If the need is care, your council can assess your needs and finances and may contribute. Other routes include deferred payment agreements, income, savings or equity release. Our guide to paying for care explains how the means test works.
Later-life options compared
| Option | Monthly payments? | Stay in your home? | Effect on inheritance | Typical minimum age |
|---|---|---|---|---|
| Savings or pension | No | Yes | Reduces savings you leave | Pension: 55 (57 from 2028) |
| Downsizing | No | No, you move | Smaller property to leave | None |
| RIO mortgage | Yes, interest | Yes | Loan repaid from estate; debt does not grow | Often 55 |
| Equity release | No (optional) | Yes | Usually reduces it most; debt grows | 55 |
| Other later-life mortgage | Yes | Yes | Depends on what remains owed | Varies; maximum ages apply |
| Family support | Depends on terms | Usually | Depends on arrangement | None |
How to decide between later-life options
Useful questions to ask:
- What is the money for? A one-off cost, regular income, clearing a mortgage or care can point to different options.
- Can you afford monthly payments? If not, options without payments may fit better.
- Do you want to stay in your home? If moving is acceptable, downsizing becomes an option.
- How much does leaving an inheritance matter? Options differ widely here.
- What might you need later? Using everything now leaves less for care.
For rough numbers, try the equity release calculator, the RIO affordability calculator and the downsizing calculator. Results are indicative, not quotes.
Speaking to a regulated adviser
Equity release requires advice from an FCA-regulated adviser, and mortgages are regulated too. A good adviser should compare the alternatives with you, not just one product. Our guide to regulated advisers in later life explains what to look for.
Prefer to read more first? Explore our guides
Free to use. No obligation. We do not provide financial advice.
Frequently asked questions
Is equity release the only option after 55?
No. Other later-life options include using savings or pension income, downsizing, a retirement interest-only (RIO) mortgage, another later-life mortgage, or help from family. Each affects your income, home and inheritance differently, and a regulated adviser should consider alternatives before recommending equity release.
Which later-life options need regulated advice?
You must receive advice from an FCA-regulated adviser before taking out equity release. Mortgages, including RIO mortgages, are also regulated and normally arranged with advice. Downsizing, using savings and family support are not regulated products, but a financial adviser, solicitor or tax adviser can still help with the wider effects.
Can I combine more than one later-life option?
Yes, some people do. For example, you might use some savings alongside a smaller RIO mortgage, or downsize and release a modest amount from the new home. Combining options can reduce reliance on any one of them, but adds complexity, so an adviser should look at the whole picture.
Which later-life option affects inheritance least?
It depends on your circumstances. Downsizing or spending savings adds no debt, though the money you use is gone. A RIO mortgage keeps the debt level if you pay the interest. Equity release usually reduces inheritance most, because interest builds up on the loan over time.
What if I need to pay for care rather than raise a lump sum?
Your local council carries out a needs assessment and a financial assessment, and may contribute if your capital is below set limits. Some people then use income, savings, a deferred payment agreement or equity release for their share. Our guide to paying for care explains each route.
Do the calculators tell me which option to choose?
No. The equity release, RIO affordability and downsizing calculators give rough, indicative figures to help you understand the numbers, not quotes or recommendations. Lenders apply their own criteria, and only an FCA-regulated adviser can tell you what may be available and suitable for you.