Pensioners facing mortgage debt burden
One in six pensioners are still burdened by their mortgage, owing an average of more than £45,000 each, research has showed.
And one in three people who still do not own their home outright owe more than £50,000, while one in 10 have a debt of more than £100,000 to clear, according to Scottish Widows Bank.
The bank said pensioner debt levels are higher because people are buying homes later in life and remortgaging to provide retirement income.
The situation was set to continue, the report added, with half of pre-retirees in the 55 to 65-age range set to hold a mortgage into retirement. The average debt for this age range is nearly £62,000.
Murdo McHardy, head of product development and marketing at Scottish Widows Bank, said: "Our research shows that by the time they come to retire a significant number of pensioners still have a mortgage outstanding on their property, adding pressure to their hard-earned retirement fund."
"With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement."
With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement, pointed out Mr McHardy. The knock on effect of getting on the housing ladder later is that money that could have been put into a pension is being used on monthly mortgage payments.
"This trend is only going to continue to grow for as long as first time buyers struggle to get onto the housing ladder before the age of 35," he added.
One in six pensioners are still burdened by their mortgage, owing an average of more than £45,000 each, research has showed.
And one in three people who still do not own their home outright owe more than £50,000, while one in 10 have a debt of more than £100,000 to clear, according to Scottish Widows Bank.
The bank said pensioner debt levels are higher because people are buying homes later in life and remortgaging to provide retirement income.
The situation was set to continue, the report added, with half of pre-retirees in the 55 to 65-age range set to hold a mortgage into retirement. The average debt for this age range is nearly £62,000.
Murdo McHardy, head of product development and marketing at Scottish Widows Bank, said: "Our research shows that by the time they come to retire a significant number of pensioners still have a mortgage outstanding on their property, adding pressure to their hard-earned retirement fund."
"With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement."
With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement, pointed out Mr McHardy. The knock on effect of getting on the housing ladder later is that money that could have been put into a pension is being used on monthly mortgage payments.
"This trend is only going to continue to grow for as long as first time buyers struggle to get onto the housing ladder before the age of 35," he added.
posted by tony at 7:24 PM
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