Posted: Mon Aug 13, 2007 10:55 am
20% pensioner homeowners still have mortgage debt, Widows pension study
One in five retired homeowners, around 1.1 million individuals, still have a mortgage with an average debt outstanding of £38,000 and another £5,900 owed on unsecured debt such as personal loans and credit cards. Even more alarming, one in 12 retirees still have children who are financially dependent.
Research from Scottish Widows UK Pensions Report 2007 also reveals that one in eight pensioner homeowners owe more than £50,000 on their mortgage, putting increased pressure on retirement income.
'Our research shows that by the time they come to retire a significant number of pensioners still have a mortgage outstanding on their property, adding financial pressure to their hard-earned retirement fund,' said Ian Naismith, head of pensions market development at Scottish Widows.
The study also shows that many pre-retirees aged 50 to 59 are a long way from owning their own home, suggesting that the trend of retirees still being burdened by monthly mortgage repayments is likely to continue. Of those in this age bracket over four out of 10 (42%) still have a mortgage with an average debt of £54,300. And of those aged between 60 and 64 one in four (25%) have a mortgage and the average debt is £42,800.
'It is important for those people who will be reaching retirement in the next few years, and still have debt outstanding on their mortgage, to consider how best to prepare themselves for the eventuality of having to juggle their debts on a reduced income when they stop working,' Naismith warned.
'With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement. The knock-on effect of getting on the housing ladder later is that money that could have been put into a pension is being used on monthly mortgage payments.'
The research also shows that one in 12 (almost 700,000) retirees have the added burden of one or more financially-dependent children. Almost two thirds of these offspring are aged 18 and over with 16% aged over 35.
Those in retirement believe you should start saving for retirement sooner rather than later. When asked at what age you should start putting money away, retirees suggests 27 years and 7 months old, almost three years earlier than those currently aged 18 to 29 who think 30 years and 4 months is a good time to start.
Retirees are also more sanguine about what is meant by being 'well off', believing an annual household income of £27,700 will be the envy of your neighbours, compared to the nation as a whole who believe you need £36,300.
Perhaps most worrying for those currently not in retirement and not saving, is that today's retirees have an average household income of £22,900. With the basic state pension providing only £7,259 a year for a couple, today's retiree couple is evidently in a position to boost this amount by up to two times more with income from other sources such as personal pensions, investments and savings.
Source: citywire.co.uk
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One in five retired homeowners, around 1.1 million individuals, still have a mortgage with an average debt outstanding of £38,000 and another £5,900 owed on unsecured debt such as personal loans and credit cards. Even more alarming, one in 12 retirees still have children who are financially dependent.
Research from Scottish Widows UK Pensions Report 2007 also reveals that one in eight pensioner homeowners owe more than £50,000 on their mortgage, putting increased pressure on retirement income.
'Our research shows that by the time they come to retire a significant number of pensioners still have a mortgage outstanding on their property, adding financial pressure to their hard-earned retirement fund,' said Ian Naismith, head of pensions market development at Scottish Widows.
The study also shows that many pre-retirees aged 50 to 59 are a long way from owning their own home, suggesting that the trend of retirees still being burdened by monthly mortgage repayments is likely to continue. Of those in this age bracket over four out of 10 (42%) still have a mortgage with an average debt of £54,300. And of those aged between 60 and 64 one in four (25%) have a mortgage and the average debt is £42,800.
'It is important for those people who will be reaching retirement in the next few years, and still have debt outstanding on their mortgage, to consider how best to prepare themselves for the eventuality of having to juggle their debts on a reduced income when they stop working,' Naismith warned.
'With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement. The knock-on effect of getting on the housing ladder later is that money that could have been put into a pension is being used on monthly mortgage payments.'
The research also shows that one in 12 (almost 700,000) retirees have the added burden of one or more financially-dependent children. Almost two thirds of these offspring are aged 18 and over with 16% aged over 35.
Those in retirement believe you should start saving for retirement sooner rather than later. When asked at what age you should start putting money away, retirees suggests 27 years and 7 months old, almost three years earlier than those currently aged 18 to 29 who think 30 years and 4 months is a good time to start.
Retirees are also more sanguine about what is meant by being 'well off', believing an annual household income of £27,700 will be the envy of your neighbours, compared to the nation as a whole who believe you need £36,300.
Perhaps most worrying for those currently not in retirement and not saving, is that today's retirees have an average household income of £22,900. With the basic state pension providing only £7,259 a year for a couple, today's retiree couple is evidently in a position to boost this amount by up to two times more with income from other sources such as personal pensions, investments and savings.
Source: citywire.co.uk
Please post any news stories about IVAs here:
http://www.iva.co.uk/forum/default.asp?CAT_ID=5
See my Blog:
http://ivanews.blogs.iva.co.uk