12 million will have mortgages in retirement
22 April 2004
More people will still be making mortgage repayments into their retirement, new research from Prudential has revealed.
This prediction comes after new data has shown that first time buyers are waiting longer to step onto the property ladder and that a growing number of people start a new mortgage term whenever they move house.
"The reality is that pensioners are still going to be paying off the mortgage as they hit retirement - a time when their average income drops by almost £4,200 and other financial pressures come into play," says Ali Crossley, director for Prudential's equity release plans.
The research found that 42 per cent of first time buyers are now over the age of 35. And as many as 21 per cent are over 45-years-old - more than one million people in the UK.
In addition, over 10 million people aged between 35 and 65 have started a new mortgage term at least once when they moved home and a further one in four, over 12.5 million people, are set to have a mortgage at retirement.
These shocking statistics mean that the luxury of owning your home outright before retirement is going to be a thing of the past.
Mr Crossley added: "Having worked for 35 or 40 years, retirement should not be a disappointment. However, we know that people underestimate how long they are going to live and greatly underestimate how much money they will need to save for retirement."