A third of pensioners left to pay a mortgage
October 15, 2008
According to a recent report one in every three people that reach retirement age will still be paying off their mortgage when they retire. It is claimed that over one million homeowners will have been unable to pay off their mortgage loan by the time they hit sixty five and come to retire. With people reaching retirements age having to prepare for a sharp fall in income in most cases, this could cause a real problem for many people, who may not be able to raise the mortgage repayments.
Many people that retire in the future may struggle more than those that have retired in the current generation, and this is due to the collapse of the final salary pension scheme, according to some industry officials. It was found by researchers that there are around 1.4 million homeowners aged fifty five and over who will have to continue paying their mortgages for over ten years, taking them into retirement age.
The report went on to show that the average mortgage debt amongst those aged fifty five and over was just over £55,000, and the average amount of time that was left to pay off the loan was eight years.
One official said: ‘Many baby boomers are facing up to the reality of still having a mortgage debt close to or even beyond their retirement age. Even those that should be debt-free by 65 still have substantial commitments.’
She added: ‘It is crucial that the next generation of homeowners do all they can to be debt-free earlier.’ The report also showed that many people that reach retirement age still continue to support their adult children financially in some way, and even their grandchildren, which adds further financial pressure.
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