One in seven may be paying off their mortgage in retirement

One in seven people think they will still be paying their mortgage at the age of 70, according to research by Aegon.

In the past, mortgages were usually paid off well before retirement but a survey of 700 adults found that 14% expect to still be paying off their house purchase at 70.

This is due to a combination of getting on the housing ladder later, higher house prices, and the ability to borrow 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,” said Steven Cameron, pensions director at Aegon.

“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. As our population ages, we need to look creatively at how to join up employment, pension and housing policies.”

With younger generations finding it harder than ever to get on the property ladder, the number of lifetime renters is also set to rise.

Among those currently renting their home, 42.5% think they will still be renting at age 70.

“The impact rent payments will have on your retirement plans needs to be carefully considered,” Cameron warned.

“Pensions typically take over when salaries stop at retirement. But even without having to fund housing costs in retirement, many people are not saving enough to maintain their lifestyle after work. If saving more into a pension is not an option, working into later life might be the only choice tenants have to keep a roof over their heads.”