Halifax Intermediaries is extending its lending to those in retirement to 70-year-olds, to reflect the increasing number of people who remain in work beyond the state pension age.
From Monday mortgage applicants who intend to work beyond the state pension age, up to a maximum age of 70, will be able to use their earned income to calculate the mortgage amount.
Ian Wilson, head of Halifax Intermediaries, said: “Research shows around a fifth of the UK population works beyond the state pension age in some capacity to age 70, as demographics and working habits continue to change.
“These changes in our lending policy will help us to meet the needs of more customers who choose to work longer.
“We continually monitor and update our products and policies to ensure they reflect the changing needs of our customers, and we’ll continue to support people who wish to continue working longer.”
At the moment when mortgages extend beyond retirement affordability is based on the income a customer will have in retirement.
For all new applications, including mortgages, further advances and product transfers, current earned income will be used in the affordability assessment if the customer intends to work beyond state pension age, as long as the mortgage term does not go beyond the applicant’s 70th birthday.
If the term extends past 70 or the applicant’s anticipated retirement age if that’s sooner, Halifax will continue to use anticipated retirement income in the mortgage affordability assessment.
Adviser view
Daniel Bailey, mortgage broker with Derbyshire-based Middleton Finance, said: “I think this is a change we are starting to see with more lenders, purely because more people are living longer and working longer and it makes sense.
“Many clients I see do anticipate working beyond retirement age.”
