Research from pensions and retirement specialist LV= highlights how millions of people are retiring with large mortgages debts.
The LV= Wealth and Wellbeing Monitor* - a quarterly survey of 4,000+ UK adults – reveals:
Outstanding mortgages and retirement are a worry for those who haven’t yet stopped working:
Those aged 55-64 are considering several ways to pay off mortgage debt in retirement:
“The LV= Wealth and Wellbeing Monitor highlights how for millions of people the dream of a mortgage–free retirement is over. The huge rise in house prices – and accompanying longer mortgage terms - mean millions of people will go past their retirement age with large mortgages to pay."
“Retirement is a major life change for people. The switch from bringing in a regular income to living off pensions and savings for the rest of your life can put a strain on finances. A mortgage is often a household’s largest monthly bill and LV=’s research shows that millions of people already worry about running out of money in retirement."
“A large mortgage will add to their concerns, particularly if interest rates rise significantly, and paying a large mortgage means many people will draw down money from their pension at a rate that is unsustainable."
“People approaching retirement have several options when paying off their mortgage. Selling your home and moving to a smaller property is one of the simplest choices but some people use the 25% tax-free cash to pay off or reduce their mortgage while others will consider a lifetime mortgage if the outstanding balance is small enough. Consulting a financial adviser will enable people to find the best option for them.”
* LV= surveyed 4,000 nationally representative UK adults (of which at least 500 were mass affluent) via an online omnibus conducted by Opinium in March 2022.