More UK over-55s are borrowing against their homes
Key Points
- L&G's lifetime and retirement interest-only lending rose to £128 million in six months.
- The insurer credits pricing changes made in the second half of 2025.
- Lifetime mortgages roll up interest and repay on death or a move into care.
- Retirement interest-only mortgages need monthly interest payments instead.
- L&G's total book of these loans stands at £5.87 billion.
Legal & General lent £128 million through lifetime and retirement interest-only mortgages in the first half of 2026, up from £104 million a year earlier.
The insurer credited pricing changes it made in the second half of 2025 for the increase, and said volumes remain sensitive to market conditions, according to its half-year results published on Wednesday (5 August).
A lifetime mortgage lets a homeowner aged 55 or over borrow against their main residence without making monthly repayments. Interest rolls up on the balance, and the loan falls due when the borrower dies or moves into long-term care.
A no negative equity guarantee caps the debt at the sale value of the property, so any shortfall lands on the lender rather than the estate.
A retirement interest-only mortgage works differently. The borrower pays the interest each month and repays the capital on death, a move into care or a sale, which keeps the balance from growing. Lenders assess affordability on the monthly interest alone rather than on the borrower’s ability to clear the capital.
L&G’s existing book of these loans stands at £5.87 billion, slightly below the £6.07 billion it held a year ago, as redemptions continue to outpace new lending. The company values the loans using an assumed house price growth rate of 3.5% a year, against 3.4% at the same point last year.
Annuities up
Legal & General sold £1 billion of retail annuities in the first half of 2026, 36% more than in the same period last year.
An annuity converts a pension pot into a guaranteed income, usually for the rest of the buyer’s life, and the amount that income buys depends heavily on interest rates at the moment of purchase. L&G described a strong pipeline entering 2026 and strong application levels since the start of the year.
Two forces sit behind the demand, according to the company. Higher interest rates continue to lift the income a given pot can secure, and a growing number of people reach retirement with a defined contribution pot rather than a workplace pension that pays a set income for life.
Those savers increasingly use part of the pot to lock in a floor of guaranteed income and leave the rest invested. L&G calls itself the market leader in retail annuities.
The company’s retail annuity assets grew to £17.9 billion from £17.1 billion a year earlier. It said it continues to manage pricing and volumes actively, and that it has sharpened its pricing on lifetime annuities.
The pattern extends to company pension schemes. L&G’s institutional arm took on £2 billion of UK pension scheme buyouts across 11 schemes in the first half, rising to £3.7 billion by the end of July, with a further £1.7 billion of deals where it holds exclusivity.
