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wealth and wellbeing hub

The dream of a mortgage-free retirement is out of reach for millions

3 minutes

A growing number of homeowners will reach pension age before they’ve managed to pay off their mortgage

According to research from our Wealth and Wellbeing Research Programme*. The statistics shown below are as a result of a survey we conducted in March 2022.

  • A third (4.5m) of mortgage holders don’t think they will have paid their mortgage off by the time they reach 65.
  • 9% (1.2m) of mortgage holders are not sure they will ever be able to pay off their mortgage.
  • 1.5m of those that are already retired said they still had outstanding mortgage debt when they finished work for good. 




For most people, buying a house is the most expensive purchase they’ll ever make and represents the largest monthly expense. However, longer mortgage terms and a steep rise in house prices over recent decades have saddled some homeowners with more debt for longer, and they’re running out of time to settle their mortgage before they stop working.  

Millions are already worried about running out of money in retirement, and an outstanding mortgage will only add to these concerns. We found that the average amount left to pay on a mortgage, at retirement, is £43,000, but 19% (277,000) had debts of £50,000- £99,000 and 11% (165,000) had more than £100,000.

How those at the end of their working life coped with paying off their mortgage debt:

  • 56% said they paid the mortgage debt with their pension/lump sum
  • 5% downsized
  • 6% continued doing some paid work
  • 5% took out Equity Release 

17% are worried about how they will pay their mortgage when they retire

The main worry for workers is that they won’t be able to afford to retire when they want to. Half of working adults between the ages of 55 and 64, said they’d carry on doing paid work after they officially retire in order to pay off their mortgage. And although a quarter would use their pension to pay off their mortgage this could leave them exhausting their life savings early.  

Whichever solution people choose to clear their mortgage or keep up with repayments, millions will make compromises such as; continuing to work, selling up and downsizing, taking out equity release or burning through their life saving at a faster rate than they’d hoped or planned.

*The LV= Wealth and Wellbeing Research Programme is a quarterly survey of 4,000 people to understand UK consumers and their attitudes to their personal finances and wellbeing. The statistics shown here are as a result of the survey we conducted in March 2022.