Well Here Is Something To Look Forward To

[laurejon]

Millions still pay mortgage well into their retirement

By Alexandra Frean, Social Affairs Correspondent

THE children have left home, the house is paid off and 20 or so years of leisurely retirement stretch ahead. This is every homeowner’s ideal, but for the one million pensioners who still have a mortgage it is no more than a dream.

One in six homeowning pensioners has an outstanding mortgage, with an average debt of £45,313, a survey from Scottish Widows Bank says.

A third of pensioners with a mortgage owe more than £50,000, and one in ten has a debt of more than £100,000, the YouGov poll of 1,472 people aged 55 and over found. That brings the total mortgage debt of pensioners to £47 billion. Although the situation can put increased pressure on incomes during retirement, the bank expects the trend to continue. Just over half of people aged between 55 and 65 who are yet to retire are still burdened with a mortgage averaging £ 61,856.

The survey also found that people with higher incomes were more likely still to have a mortgage in the run-up to retirement, with four out of ten people earning more than £40,000 a year owing money on their home loan, compared with only 18 per cent of people who earned under £20,000.

Murdo McHardy, of Scottish Widows, said that while people who had paid off their mortgage by the age of 55 or so might be able to increase payments into their pension fund before retirement, those with an outstanding mortgage debt were not in a position to do this. Instead, pensioners with mortgages were turning to equity release schemes or remortgaging in order to pay for their retirement.

“This trend is only going to continue to grow for as long as first-time buyers struggle to get on to the housing ladder before the age of 35,” he said.

“It is, of course, a little surprising that people who have a higher income also tend to have larger liabilities. But 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.”

The findings suggest that attitudes towards home ownership are changing. Increasing numbers are willing to sacrifice the peace of mind that comes with paying off the mortgage early, if they can get a better return for their money elsewhere.

Mr McHardy said: “It is no longer just bricks and mortar – now it is also a flexible source of income, capital we can draw on when we need to, to pay for school fees or extensions, or even draw on in our old age. This survey shows that we no longer are afraid of debt — as long as we can afford it.”

Pensioners and housewives are the answer to Britain’s skills shortages, but many need more help to get back into the workforce, a report claims.

From 2010, the number of young people reaching working age will begin to fall by 60,000 a year, changing the shape of the workforce, research from City & Guilds suggests. Britain will need 2.1 million new workers between 2010 and 2020, a demand that can be met by a combination of people working longer, immigration and a huge rise in people re-entering the labour force.

[BillyShears]

Millions still pay mortgage well into their retirement

With the large number of people going for IO mortgages, who will probably only wake up 24 years into a 25 year mortgage to realise that they only have one year to start saving to pay off the price of the house, this may become much more common.

Billy Shears

[Guest Charlie The Tramp]

A third of pensioners with a mortgage owe more than £50,000, and one in ten has a debt of more than £100,000, the YouGov poll of 1,472 people aged 55 and over found. That brings the total mortgage debt of pensioners to £47 billion. Although the situation can put increased pressure on incomes during retirement, the bank expects the trend to continue. Just over half of people aged between 55 and 65 who are yet to retire are still burdened with a mortgage averaging £ 61,856.

Now you know where the money came from for that holiday home abroad.

And not forgetting this group who should know better.

To their friends and neighbours. they probably seem like high fliers who are sitting pretty. They earn at least £50,000 a year, have high powered jobs, big houses, and expensive cars.

But looks are notoriously deceptive and debt experts warn that impoverished professionals are on the increase.

There has been a sharp rise in the number of people or families who take home £3,000 a month net but are seeking help from the Consumer Credit Counselling Service.

Large numbers of middle class families seem to have gone deep into hock through credit cards, loans and remortgages to keep up appearances.

But rises in interest rates and higher household bills have driven many to the edge of financial meltdown.

[Lesley]

With the large number of people going for IO mortgages, who will probably only wake up 24 years into a 25 year mortgage to realise that they only have one year to start saving to pay off the price of the house, this may become much more common.

Billy Shears

I am sure that you will correct me if I am wrong but I always thought that if you had an interest only mortgage that you had to show that you had made sufficient provisions for paying it off at the end of the term. I only say this because my first mortagae was in the 8o's and was linked to an endowment.

[StrapInThisIsGoingToHurt]

The origin of the word "mortgage" is latin: it literally means a "bet on death."

mort = death

gage = bet

So-named because the lender had to be sure you would be alive throughout the repayment period.

[Lesley]

The origin of the word "mortgage" is latin: it literally means a "bet on death."

mort = death

gage = bet

So-named because the lender had to be sure you would be alive throughout the repayment period.

An dif not he gets the insurance or is able to sell the property... doesnt sound lik emuch of a bet.. heads I win tales you lose.

[theChuz]

The origin of the word "mortgage" is latin: it literally means a "bet on death."

mort = death

gage = bet

So-named because the lender had to be sure you would be alive throughout the repayment period.

If memory serves me right its a derivitive of the french word mortir which means 'agreement til death' basically the same though i suppose