One in six pensioners’ still owes mortgage payments |
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Thu, 11 May 2006 12:35
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LONDON - A new survey has shown that one in six pensioners is still paying off mortgages and owes an average amount of £45,000 each. The survey by Scottish Widows Bank found that of the third of those surveyed who were not the owners of their homes owed £50,000.
Around one in ten owed £100,000, the survey found. Scottish Widows Bank said that the prevailing situation was hurting people with limited incomes during retirement. However, this particular trend was set to continue since over 50 percent of people in the age bracket of 55 to 65 years still owed £61,856.
"Our research shows that by the time they come to retire a significant number of pensioners still have a mortgage outstanding on their property, adding pressure to their hard-earned retirement fund.," said Murdo McHardy of Scottish Widows Bank. "With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement."
The survey said that people who had higher incomes were more likely to have mortgage payments left out to pay. Four among ten people with incomes over £40,000 a year still had mortgage payments, while 18 percent of people who earned less than £20,000 still owed money on their home loans.
"This trend is only going to continue to grow for as long as first-time buyers struggle to get onto the housing ladder before the age of 35," McHardy said. "It is important for those people who will be reaching retirement in the next few years, and still have debt outstanding on their mortgage, to consider how best to prepare themselves for the eventuality of having to juggle their debts on a reduced income when they stop working."
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