Mortgage terms past retirement: what advisers should evidence

01

What MCOB 11.6.15G says

MCOB 11.6.15G(2) covers any regulated mortgage contract, second charges included, whose term extends beyond the date the customer expects to retire. Where that date isn’t known, the state pension age applies. Firms should take a prudent and proportionate approach to the customer’s income beyond that date.¹

The guidance scales the evidence to the time left. Where retirement is many years away, confirming some pension provision, such as a pension statement, may be enough. Where it is close, expect to look at the pension income itself. Firms should also take a common-sense view of the retirement date the client gives.¹

02

Why consolidation cases run into it

Debt consolidation often lengthens the term to bring the monthly payment down. A 50-year-old consolidating over 20 years is repaying at 70. The longer the term, the more likely it crosses retirement and the more interest the client pays in total.

The FCA’s March 2026 review praised firms that recorded discussions about planned retirement age. Its wider findings on debt consolidation, that a lower monthly payment was too often shown without the total cost, apply with extra force when the term also runs into retirement.³

03

A disclaimer is not an assessment

In DRN2957116 a borrower signed a disclaimer late in the sale saying he intended to work past 65 and would downsize if he didn’t. The ombudsman agreed that a disclaimer “is not a substitute for advice”, noting there had been no assessment of affordability into retirement, of whether he could keep doing manual work past 65, or of whether downsizing was likely.²

04

What to ask and record

These are the facts that let you, or the specialist you refer to, assess affordability after retirement and show the assessment was made.

• The client’s planned retirement age, and how sure they are of it
• Pension statements or forecasts, including the State Pension forecast where relevant
• Other income expected after retirement, such as rental income, and its evidence
• Expected outgoings after retirement
• Whether a shorter term or a smaller loan would avoid running past retirement
• The client’s plan if retirement income falls short, and why it is realistic

05

Income that isn’t a pension

Retirement income doesn’t have to be a pension. In DRN-5849530 the ombudsman found it unfair for a lender to accept only pension income after retirement when it had accepted the same type of income before it, and pointed to MCOB’s recognition that borrowers can have different sources of income with different evidence. Specialist lenders often look at this more flexibly than mainstream ones.¹

06

When to look at later-life options

For older clients, a term that runs well into retirement can be a sign to look at later-life lending, such as a retirement interest-only mortgage or equity release, alongside a shorter standard term. Each has different costs and consequences for the estate, and needs advice from someone qualified in that area.