In a speech at the Later Life Lending Summit, the Financial Conduct Authority set out its view that later life lending could become a "fourth pillar" of retirement funding, but said the market is not yet ready to deliver at the scale future demand may require. Emad Aladhal, the FCA's director of retail banking, argued that housing wealth is likely to play a larger role in retirement planning and said better consumer outcomes will depend on a more joined-up approach across product design, advice and support, with industry expected to lead that change. The speech framed the opportunity against a widening retirement funding gap and a potentially much larger market. Citing external research, it said 51% of households aged 60 and over could benefit from accessing housing wealth in retirement by 2040, with around GBP 4.3 trillion in housing wealth and an estimated GBP 23 billion a year available to unlock at today's prices. At the same time, FCA data showed limited current take-up: of almost 330,000 mortgages advanced to over-55s in 2025, only 9% were lifetime mortgages or retirement interest-only products, or roughly 30,000 contracts. The FCA said the constraints are on both supply and demand, including limited product and funding development, weak consumer awareness and trust, and fragmented advice that does not consider mortgages, pensions, investments and later life planning holistically. On next steps, the FCA said it is consulting on retirement interest-only affordability, will hold workshops in the summer on what would be needed to make more holistic advice a reality, and is conducting a focused market study on the later life mortgage market. That study is examining whether the sector is meeting consumer needs through innovation, funding and competition, and how consumers move between mainstream and later life options, with the FCA saying it will pursue any changes identified once the study is complete.

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