1.5m retirees nonetheless paying mortgages



 

 

Tens of millions of mortgage holders anticipate to nonetheless be paying off mortgages at age 65 and a few will dip into pensions to take action, in response to new analysis.

Rising housing prices imply the mortgage 'dream' is over for a lot of mortgage holders, says LV=.

A lot of at this time's mortgage holders will face paying for residence loans for years previous regular retirement age and a few won't ever clear the loans, the analysis discovered.

The research for the LV= and Wellbeing Monitor - overlaying 4,000 UK adults - discovered that 12% (1.5m) of retirees stated they nonetheless had excellent mortgage debt after they retired, with this quantity set to develop.

Of those that had excellent mortgage debt after they retired, greater than half (56%) stated they used their pension to repay their mortgage money owed. 

Some 6% stated they continued to do some paid work to assist repay the mortgage, 5% downsized and 5% used fairness launch. Solely 4% spoke to a monetary adviser, the research discovered.

For these with a mortgage who've but to retire a 3rd (33% or 4.5m) of mortgage holders don't consider they may have the ability to repay their mortgage by 65. Some 9% (1.2m) of mortgage holders are not sure if they may ever clear their residence mortgage.

The common quantity to repay at retirement is £43,000, however 19% (277,000) had money owed of £50,000 - £99,000 and 11% (165,000) greater than £100,000 

These aged 55-64 stated they have been contemplating a number of methods to repay mortgage debt in retirement. Half would stick with it with paid work, 1 / 4 would use their pension to repay their mortgage, 24% would downsize, 9% would use fairness launch and eight% would lease out a room.

Clive Bolton, managing director of safety, financial savings and retirement at LV=, stated: “The LV= Wealth and Wellbeing Monitor highlights how for hundreds of thousands of individuals the dream of a mortgage–free retirement is over. The large rise in home costs – and accompanying longer mortgage phrases - imply hundreds of thousands of individuals will go previous their retirement age with giant mortgages to pay.  

“Retirement is a significant life change for individuals. The swap from bringing in a daily revenue to dwelling off pensions and financial savings for the remainder of your life can put a pressure on funds. A mortgage is commonly a family’s largest month-to-month invoice and LV=’s analysis reveals that hundreds of thousands of individuals already fear about working out of cash in retirement. 

“A big mortgage will add to their considerations, significantly if rates of interest rise considerably, and paying a big mortgage means many individuals will draw down cash from their pension at a fee that's unsustainable.”




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