Higher house prices, getting on the property ladder later in life, and the ability to borrow for longer are changing expectations about mortgage debt in retirement, according to a study by Aegon.

At the same time, two in five people currently renting their home believe they will still be renting at the age of 70.

In the 10 years to April 2017, the percentage of households privately renting increased across all working age groups, according to the Family Resources Survey by the Department for Work and Pensions (DWP).

Steven Cameron, pensions director at Aegon, said: “Paying off your mortgage in time for your 70th birthday is now far from a given. Inflated property prices mean those getting onto the property ladder are doing so at later ages and are borrowing more for longer.

“Those left with an outstanding mortgage on their property face the prospect of either budgeting mortgage payments into their retirement or alternatively continuing to work.

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“We know that one in four people expect to still be working at 70 but not everyone will be fit enough or want to do so.

“That’s why it’s good to see the development of new solutions for older borrowers, such as retirement interest-only mortgages.”

Joined-up policies

Cameron also noted that as the UK population ages, it is important to look creatively at how to join up employment, pension and housing policies.

And the impact rent payments will have on retirement plans needs to be carefully considered too.

Cameron added: “Renting while working is a very different situation to renting when retired.

“People need to consider how feasible it is to fund rent when they are no longer earning a salary.

“It would be dangerous to assume the state will continue to provide the same level of housing benefits to future retirees as they currently pay.”