Homeowners increasingly expect to be paying off their mortgage in retirement

The survey of 2,000 people was carried out on behalf of investment firm Hargreaves Lansdown. One in six of the respondents said they thought they would still be paying off their mortgage when they reached the state retirement age.

Generation gap

The optimism of those questioned showed a generational divide, with the younger respondents being more hopeful than those nearer retirement age:

• Of the respondents who were aged 55 with a mortgage, more than a quarter (26%) said they still expected to be paying it off beyond the age of 70, with one in eight (12%) saying they didn’t think they would ever pay it off.
• Of those aged 16 to 34, four fifths (80%) expected to pay off their mortgages before they hit 65.

Reasons for clearing mortgages later

Hargreaves Lansdown have attributed several factors to the growth in the number of people who expect to be paying off their mortgage into retirement:

• Higher property prices
• More people in higher education, leading to homeowners buying later
• More people dipping into equity to support children
• More people starting again after divorce

Equity release as a potential solution for retirement finances

The report’s authors suggest eight potential steps that people who haven’t cleared off their mortgage before they retire can take to ease their finances after 65; one of them is equity release.

“Equity release is never a magic wand to be waved as a catch-all solution; it’s an important decision that requires proper consideration of the disadvantages as well as the advantages,” advises the founder of 55+ Equity Release, Jan Johnson. ​“This means finding a trusted expert who will consider your personal circumstances and give you transparent, honest advice to help you decide if it is an appropriate solution for you.”

If you’re considering equity release to ease your retirement finances, one of our expert equity release advisers will be happy to talk to you at your convenience to make sure you – and your loved ones – understand what’s involved so you can make an informed decision about it.