Mortgage free dreams shattered as Britons set to have £100,000 debt by 65 | Personal Finance | Finance
Many will hope to clear their mortgage before they retire, as their income is likely to be less. However, new research has highlighted how millions of people are reaching retirement age with outstanding mortgage debt.
The LV= Wealth and Wellbeing Monitor showed 12 percent of retirees having remaining mortgage debt when they left the workforce.
The average amount to pay off at retirement was found to be £43,000.
However, some 19 percent of those asked said they had debts of more than £100,000 to reckon with in later life.
For those who have not yet stopped working, fears about impending retirement and mortgages are stark.
READ MORE: Pensioners ‘at risk’ of cold homes as energy costs soar
Mr Bolton also expressed concerns about rising interest rates and the impact they could have on mortgages.
It could mean people are spending longer paying off their mortgage, which could eat significantly into their retirement.
Furthermore, a large mortgage could also mean people draw down more money from their pension savings.
This could be at an unsustainable rate, and therefore create other financial issues in later life.
However, there are some options at a person’s disposal when it comes to paying off their mortgage.
Mr Bolton continued: “Selling your home and moving to a smaller property is one of the simplest choices.
“But some people use the 25 percent tax-free cash to pay off or reduce their mortgage.
“Others will consider a lifetime mortgage if the outstanding balance is small enough.”
Many of these options can be financially complicated, it is worth noting.
A lifetime mortgage, for instance, may not suit everyone as it means repayments are due when a person moves into long-term care or passes away.
As such, Mr Bolton recommends consulting a financial adviser for any major decisions.
These professionals can often offer tailored advice to assist Britons in their decision-making process.
