The later life lending market is expected to almost double by 2029, according to data collected by more 2 life.
The firm says that by the end of this year, lending is anticipated to reach £295bn, with this figure expected to rise to £548bn by 2029 – growth of of over 85 per cent.
Despite this projection, research completed by the Centre for Economics and Business Research on behalf of more 2 life, shows that recent growth has in fact slowed slightly. In 2014, the equity release market was worth £200bn and is predicted to reach £397bn by 2024 – 98.5 per cent growth.
Borrowers in the over 65 category are forecast to accumulate £91bn of debt by the end of this year, and reach £199bn by 2029.
Furthermore, the analysis highlights that those aged 65 to 74 have average net yearly savings of £3,100, marginally higher than those under 30, who save £3,050. For comparison, those aged 50 to 64 put away £8,100 a year on average.
The lender believes that the increase in debt is accountable to a rise in older households, rising house prices, and consumers increasingly using unsecured credit.
More 2 life chief executive Dave Harris says: “With more people buying their first homes later in life and the increasing use of unsecured debt, we are finding that more people are entering retirement still committed to ongoing repayments.
“Not only are we seeing debt levels increase, but 65 to 74 year olds have just £3,100 left at the end of the year to save. This is a worryingly small safety net and suggests that managing debt in later life may well become the norm for some people.”
Key chief executive Will Hale adds: “The vast majority of people hope to enter retirement debt free – having ideally spent the run up to finishing work paying off any outstanding borrowing and building up their nest egg.
“Today’s report clearly highlights that not only is this not happening, but many retirees do not have the financial cushion they need to deal with unexpected bills.”