Eight in 10 retired homeowners cannot access a mortgage that meets their needs, according to research by Responsible Life.

Analysis found that stringent affordability criteria that fail to treat pension drawdown as income and rely solely on the lower guaranteed income of a surviving spouse is largely to blame.

Responsible Life also questioned why lifetime mortgages are not more widely accepted by providers as an eligible future repayment plan for traditional mortgages and Retirement Interest Only Mortgages (RIOMs).

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The findings stem from analysis of data collected by the Retirement Mortgage Service (RMS), Responsible Life’s pilot project to create the UK’s first all-product, whole-of-market retirement mortgage broker.

RMS has been in operation for a year; through it, UK borrowers can contact a broker and receive regulated, impartial advice covering every provider and every type of product.

The aim of the pilot was to identify areas where the retirement mortgage market could better serve consumers.

Analysis of RMS data has revealed that 82.8%1 of over-55s who needed a mortgage or remortgage did not qualify for any product of any kind.

The creation of the RMS was the result of Responsible Life’s concern that huge numbers of consumers were being turned away by brokers who cannot assist customers by turning to other types of product.

Steve Wilkie, executive chairman of Responsible Life, said: “Retirees are being frozen out of the mortgage market because they are being sabotaged by affordability rules that are not fit for purpose.

“Retired borrowers should be allowed to show a greater variety of repayment strategies to unlock lending in later life.

“These should include plans to downsize, pension drawdown and reverting to lifetime mortgage products at the end of a mortgage term.

“Such flexibility would be in the spirit of other financial innovations that have sought to make it easier for the over-55s to navigate retirement, namely pensions freedoms.

“The interaction between products and their features in the later life lending market must be urgently addressed if they are to meet societal needs.

“The country would feel a net benefit from improvements in these areas.”