Over-55 mortgage debt up 14% year-on-year

Over-55 mortgage debt up 14% year-on-year

New Aviva research has found that just 8% of over-55 homeowners who are retired are still paying off their mortgage, compared to 31% of those who are still working.

The average amount spent on housing by over-55 mortgage holders has decreased from £315 per month in 2016 to £295 in 2017, which Aviva has attributed to low interest rates.

According to the report their average mortgage debt is now £68,612, up 14% since last year, which could be linked to an increase in people carrying interest-only mortgage debt into retirement.
 
The rising cost of living is perceived to be the greatest threat to over-55s' standard of living with over half (54%) stating this is one their most significant concerns, up from 45% this time last year – with working over-55s and the retired almost equally concerned (54% vs. 55%).

Additionally, credit card debt among the over-55s has reached a post credit-crunch high of £1,052, up 9% since last year and the highest level since Aviva began collecting the data in 2011.


When all sources of debt are taken into account (excluding mortgages), over-55s who are still working owe almost twice as much (£2490) as their retired counterparts (£1314). This suggests that servicing and clearing this debt may be a factor in more of this age group continuing to work into later life.

Lindsey Rix, Managing Director, Savings and Retirement at Aviva, said: “A growing number of Britons are prolonging their working lives and our findings suggest that the goal of a debt-free retirement may be one factor behind this. The approach to retirement is ideally a time for saving and careful financial planning, but with the rising cost of living, many people are having to resort to borrowing and still have mortgage repayments to factor into their budgets.
 
“With widespread speculation that interest rates may rise for the first time in over a decade, this record level of debt is worrying. An increase in the cost of borrowing will undoubtedly create challenging conditions for people to navigate on the approach to retirement.
 
“People’s financial needs are changing in later life with many now facing the prospect of paying off a mortgage and other debts well into their retirement. The industry must consider these changing needs and start exploring solutions to help address these issues.”

Join our mailing list:

Leave a comment



Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

view article
maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

view article
maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

view article
zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

view article
Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

view article
Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

view article
RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

view article
sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

view article
Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

view article
Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

view article
Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

view article

Related stories

More articles from Finance