According to a recent report in the Daily Mail, one in four pensioners is taking their mortgage into retirement.
A survey of 3,500 people aged 65+ reported that 27% had a mortgage and even more worryingly, the average size of that mortgage was higher amongst those over the age of 70.
Those in the 65+ age range were facing an average mortgage of £35,441 and this increased to £52,576 for those aged 70+. This constitutes an average monthly repayment of £389 on a 15 year mortgage: pretty much wiping out the earnings from a state pension.
Geoff Charles, Managing Director of Bower, says this research further highlights the financial issues faced by those in retirement; issues that could put a halt to the aspirations that form part of the retirement dream.
‘Living through retirement just about being able to pay the mortgage really isn’t what most people had in mind during their working years. What about the holidays? The new car? The kitchen refurbishment? The conservatory? Helping the children out? All the things you ever dreamt of?’ he says.
According to this same research, 12 million British pensioners are also faced with average credit card debts of £8,881 at 65+ rising to £9,084 at 70+.
Geoff Charles summarises by saying, ‘Paying off a mortgage in retirement could make a considerable difference to the standard of living, freeing up cash and opening up a whole scope of possibilities. Equity release: taking some of the value out of a home, could be the answer for many homeowners and according to one equity release provider, repaying a mortgage and repaying debt are two of the major uses of this retirement finance solution.’
Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration.
Bower is an FCA regulated independent financial advice company that offers specialist advice on equity release throughout the UK. For more information e-mail [email protected] or call 0800 4118668. Bower offers a no obligation initial consultation to homeowners considering Equity Release.