Quarter of over-60s still face mortgage debt

22 March 2007

A quarter of homeowners over the age of 60 still have outstanding mortgage debt, according to a report out today.  Research for an equity release company found that people in or approaching retirement who had not yet paid off their mortgage owed an average of £31,000 each.

According to Key Retirement Solutions, the over-60s could be saddled with mortgage debt worth a total of £98 billion.  From collecting data from more than 4,500 pensioners, they found that the average housing debt among those aged 60 to 64 years was £23,512.  That rises to more than £29,000 for 65-69 year-olds and £37,000 for people over the age of 70. 

These findings have prompted concerns that retired people are saddling themselves with too much mortgage debt.  Official statistics show that 1.4 million pensioners live on an annual income of £5,000 or less, which leaves them just £257 a month after council tax and utility bills have been paid.  Key Retirement Solutions’ analysis found that the average cost to a pensioner of servicing an outstanding mortgage was £215 a month.  Their report says this leaves the most vulnerable homeowners with just £42 a month to live on. 

A spokesman for the charity Credit Action, Chris Tapp, said:  “In this day and age, someone’s hair turning grey is not an indicator of their bank balance being any less in the red.”  He said Credit Action was concerned that this trend would only get worse, as people borrowed more and for longer and saved less, in what he called a “desperate attempt to get a foot on the housing ladder”.