Pensioners' mortgage debt grows
MORE than a third of pensioners are still paying off their mortgage, an equity release specialist yesterday claimed.It was said just over 33 per cent of people aged 65 or over had outstanding mortgage debt.
The number of pensioners using equity release plans to pay off their mortgage debt soared by 38 per cent in 2008, with an average burden of £43,069.
Those over 70 face the biggest repayments, owing an average of £48,442. Pensioners aged between 65 and 69 have a typical mortgage debt of £34,272, compared with an outstanding debt average of £104,000 across the whole mortgage market.
The group attributed the rise in the number of pensioners still paying mortgages to the failure of investment plans, such as mortgage endowments, in meeting their repayment needs.
It was also commented that to be able to afford to buy a property more borrowers were taking out loans that extended into their retirement.
Chris Tapp, said: "It used be assumed that the economic life-cycle was such that you borrowed when you were younger to leave you debt free and well set up to enjoy your retirement. These figures dramatically demonstrate how skewed this picture has become in recent years as people have been forced to borrow more and borrow for longer to afford property."
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