Saturday, February 29, 2020

Worried Pensioners Will Stay Pay A Mortgage In Their 70s

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Pensioners have some real worries about where they will live once they reach the age of 70, according to new research.

One in seven (14%) are resigned to still having to pay a mortgage when they reach 70.

Another 40% who privately rent a home consider they will still have to pay a landlord long after they retire.

The study, by financial firm Aegon, says the factors contributing to their concerns are the cost of buying a home in later life, rising house prices and the burden of repaying high borrowing.

The firm cites figures from the government’s Department of Work & Pensions that show the number of working households across all age groups is increasing.

Paying off home loans by 70 is not a given

Steven Cameron, pensions director at Aegon said: “Paying off your mortgage in time for your 70th birthday is now far from a given. Inflated property prices mean those getting onto the property ladder are doing so at later ages and are borrowing more for longer.

“Those left with an outstanding mortgage on their property face the prospect of either budgeting mortgage payments into their retirement or alternatively continuing to work.

“We know that one in four people expect to still be working at 70 but not everyone will be fit enough or want to do so.

“That’s why it’s good to see the development of new solutions for older borrowers, such as retirement interest-only mortgages.”

Impact of rent on pensions

Cameron also explained that people approaching retirement should consider the impact of privately renting a home will have on their pension income.

“Renting while working is a very different situation to renting when retired,” he said.

“People need to consider how feasible it is to fund rent when they are no longer earning a salary.

“It would be dangerous to assume the state will continue to provide the same level of housing benefits to future retirees as they currently pay.”

The average UK rent is £924 a month. While renters in London are paying £1,596 a month according to a survey by property firm Homelet in June 2018, although the figures do vary between regions.

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