A new study has found that as many as one in eight people might still be paying into a mortgage by the time they retire.
Although many of us dream of a mortgage-free life and retirement, an increasing number of households are finding that they still have money to pay for their home by the time they leave work.
Longer mortgage terms, often driven by rising house prices, as well as the increased cost of day-to-day living are all to blame for ending the dream of being mortgage-free in later life.
In fact, according to LV=, who conducted the recent research, 12 per cent of people were already in this position – a number that is likely to rise in future.
The study of 4,000 mortgage holders across the UK, found that nearly a fifth of those with debt still owed between £50,000 and £99,000.
This resulted in 56 per cent of retirees in this position using money from their pension to cover their mortgage costs, reducing the amount of money available to support themselves in later life.
Despite the need to repay a mortgage, only one in six continued to do some paid work to support their living costs.
As an alternative, five per cent downsized into a smaller property, while a similar proportion of respondents had used equity release.
Looking to the future, among those yet to reach retirement age, around a third don’t anticipate paying off their mortgage by the time they retire in their mid-60s and, worryingly almost one in 10 don’t ever expect to be mortgage-free.
This latest research highlights the importance of seeking professional, independent financial advice when planning for later life.
For more information on putting in place plans for your retirement, get in touch with us and we can refer you to our expert panel of advisers.