What the Latest Budget Means for People in Later Life

The latest Budget has prompted many people in later life to take a fresh look at their finances. While the State Pension Triple Lock remains in place, several other fiscal measures are creating new pressure points. Rising living costs, frozen tax thresholds and long-term property price growth are all shaping how individuals think about retirement income, inheritance planning and the role their home may play in the years ahead.

As a result, many homeowners are also considering whether later life lending could form part of their financial planning, particularly where property wealth plays a key role in long-term stability.

This article explores the economic backdrop, why more people are reassessing their options and what to consider before making any decisions.

Although inflation has eased from recent highs, day-to-day household expenditure has risen across energy, insurance and other essential costs, placing continued pressure on fixed incomes.

Some key tax thresholds have also remained frozen, meaning more people may gradually move into higher tax bands as pensions rise. Long-term property price growth has pushed many estates closer to inheritance tax limits, and some homeowners may be affected by the proposed High Value Council Tax Surcharge for properties above £2 million.

Interest rates have eased slightly but remain higher than the very low levels many people planned around for more than a decade.

Together, these factors are prompting more individuals to review their long-term plans and consider how their property wealth could support greater financial flexibility in later life.

While the Budget introduced several financial pressures, some areas have remained consistent and offer a degree of certainty for those planning ahead.

• income tax rates themselves have not increased

• the State Pension continues to rise under the Triple Lock

• depending on income, assets and loan-to-value, some homeowners can still access traditional borrowing, although criteria have tightened

These elements do not offset every challenge, but they highlight why personalised advice is essential. Each household will experience the Budget’s effects differently depending on income, assets and long-term goals.

• frozen income tax thresholds drawing more pensioners into tax

• unchanged inheritance tax thresholds alongside long-term property price growth

• higher living costs placing pressure on fixed incomes

• interest rates remaining elevated compared with the previous decade

• the forthcoming High Value Council Tax Surcharge for homes above £2 million

These factors do not affect everyone equally, but together they have encouraged many homeowners to reassess how their property fits into future planning.

Industry commentary shows a clear trend: more people in later life are reviewing their financial position. Rising costs, concerns around future tax exposure and increasing support for family members are all influencing how homeowners use, or plan to use, their property wealth.

This shift is not only a response to current pressures. Many people recognise that frozen thresholds and evolving tax policy may affect retirement plans for years to come. As a result, interest in later life lending and broader financial planning has grown.

At LDN Finance, we are seeing this pattern reflected in the enquiries we receive from clients who want clarity around their options in the context of changing economic conditions.

Later life lending refers to mortgage and finance options designed for people aged 55 and over. These products allow homeowners to access some of the value in their property without needing to sell or downsize.

Common options include lifetime mortgages, retirement interest only mortgages and certain residential products. Modern lifetime mortgages often include flexible features such as voluntary repayments, the option to ringfence a portion of equity for inheritance and the ability to move home in the future.

The right approach depends entirely on personal circumstances and long-term objectives. At LDN Finance, our later life lending specialists take the time to understand each client’s wider situation, including income, pension planning, property goals and family considerations, before discussing suitable options.

Before exploring later life lending, it is important to understand the long-term implications. Lifetime mortgages accrue interest, which can reduce the value passed on to beneficiaries. Some products may affect eligibility for means-tested benefits, and early repayment charges may apply depending on the lender.

There are also situations where these solutions may not be suitable. For example, if you plan to move home soon, expect a change to your income or wish to prioritise maximising inheritance, alternative strategies may be more appropriate.

Our advisers regularly work with clients and their families to review every option, including downsizing, pension planning and other ways to improve cashflow without taking on new borrowing.

The current economic climate has highlighted the importance of proactive retirement planning. Property wealth, once considered something to pass on, is increasingly viewed as a resource that can provide comfort, stability and flexibility during retirement.

This does not mean later life lending is the default solution, but it does highlight the value of reviewing your options early. Our team at LDN Finance helps clients understand the broader picture, including tax considerations and long-term affordability, so decisions can be made with clarity and confidence.

Speak to Our Later Life Lending Team