Many pensioners will be paying a mortgage when their retire
October 22, 2008
According to recent reports many people that are now aged fifty five and over will still be making repayments on their mortgages when they reach retirement age and hit sixty five. The report states that around 1.4 million pensioners have mortgage debts of over £55,000, and this is costing them over £700 a month. In addition, the average time left to repay on these mortgages is eight year, with many likely to be paying them for longer and well into retirement.
Many people due to retire in the next ten years are facing a steep drop in income due to the collapse of the Final Salary Pension Scheme, and this means that many will experience even greater difficulties, with a far lower income. In addition to having to continue making their mortgage repayments on this limited income many will also be left providing some form of financial support to their older children or grandchildren, which again adds to the strain.
According to one industry official: ‘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. It is crucial that the next generation of homeowners do all they can to be debt-free earlier.’
Another official recently stated: ‘As the cost of living is on the up, these figures, even if they are only part reflective of pensioners as a whole, are of real concern. Retirement should be a time to enjoy yourself after all those years of hard work, yet one in 20 people in their 60s, 70s and 80s admit to constantly struggling to keep up with financial commitments or having fallen into arrears.’
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