‘Shocking’ numbers to retire with mortgage debt, finds poll
Figures from The Equity Release Council, the trade body for equity release companies, suggest that, over the next 30 years, 403,908 people will retire with an average of £52,446 still outstanding on their mortgage.
The findings were based on a survey of some 2,000 borrowers.
Andrea Rozario, director general of The ERC, said: “Many people find that, due to unforeseen circumstances, they enter retirement with a small amount of debt, but the fact that over 400,000 people expect to still be repaying their mortgage when they retire is shocking.”
A fifth (23%) of those aged 55-64 believe they will retire owing an average of £65,955 and 17% of 45-54 year olds say they will owe £48,037 on their mortgage when they finish work, the research found.
The ERC said the proportion of people who believe they will retire with mortgage debt increases as they get closer to retirement.
It said this could be down to setbacks such as an underperforming endowment, meaning more people will be facing more debt than anticipated.
Rozario also said the trend could be down to people buying homes in later life and re-mortgaging on a regular basis.
“With 73% of people intending to use housing equity as part of their later life finances, many are sure to use it to solve the problem of repaying a mortgage or other debt in retirement,” she said.
“Downsizing might be the answer for those with more valuable homes but many 55 – 64s will struggle to repay over £65,000 worth of borrowing and still buy another property.”