More than 80 per cent of over 55s are unable to access a mortgage to suit their needs, according to new research.

The findings stem from data collected by the Retirement Mortgage Service, part of Responsible Life and show that stringent affordability criteria including lenders not treating pension drawdowns as income was preventing 82.8 per cent of borrowers aged over 55 from securing a traditional, retirement or lifetime mortgage.

The provider questions why lifetime mortgages are not more widely accepted by providers as an eligible future repayment plan for traditional mortgages and retirement interest only mortgages.

It says that RIOMs held great promise when they were introduced in 2018 but only the less generous guaranteed income of a surviving spouse can be taken into account for affordability tests, dramatically reducing the borrowing power of retired couples at the outset.

Responsiblie Life executive chairman Steve Wilkie says: “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.”