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Retirement Time Bomb?... Ka Boom For The Boomers?


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Survey reveals mortgage debt for older generation grows 20% year on year

A third of the UK population either in, or nearing retirement, owe a stunning £207 billion in outstanding mortgage debt according to Key Retirement Solutions...

The findings, from analysis based on 4,507 people aged 55+ who released equity in their home with Key Retirement Solutions in 2007, shows that there's been an 20% rise year on year in the average amount of mortgage debt owed by those in, or nearing retirement.

Further analysis shows:

A third of all over-55s have outstanding mortgage debt (32%), 35% of those aged 60-69 years and 29% of those 70 years+ still have mortgage repayments to make

The average mortgage debt owed by those aged 55-59 years is £29,0836

This amount increases with age to £31,3687 for those aged 60-64 years and £32,8718 for those aged 65-69

The over-70s have seen a 23% increase in the level of outstanding mortgage debt compared to 2007, and now owe on average £45,4934

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Pensioners blow cash on luxuries or give money away to relatives

More than three quarters of UK pensioners (76 per cent) with private or company pension schemes are taking lump sums out of their pension pots, averaging £24,154, as they reach retirement but astonishingly many are then blowing the money on luxuries or giving it away...

The findings from new research developed for Prudential comes despite the well publicised gap between people's retirement savings and the amount they need to live on comfortably in retirement.

Of those who had taken a lump sum from company or private pension funds, a staggering 13 per cent said they had given all or part of the sum to their children with 4 per cent giving money to other relatives and dependents. A large proportion had also used the money to treat themselves with 17 per cent using it to buy a new car, 31 per cent using it to fund home improvements, 18 per cent buying a holiday and 14 per cent just treating themselves to things they've always wanted.

http://firstrung.co.uk/articles.asp?pageid...&cat=44-0-0

Edited by Converted Lurker
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No surprise really. I was talking to a couple I know. Not very money savvy as you will see. They are both 50 years old this year. They are buying a house for £113k. The bank is lending them the deposit. A third party lender has agreed the a mortgage on the balance. They will be 70 by the time it is paid off.

Strikes me as close to criminal!!

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It's a very selective survey! It only includes older people who are applying to (who need to) borrow money through equity release with this one company. The selection bias in favour of those with financial problems/heavy outgoings is probably 100%, so it can't be extrapolated to show that all pensioners are in this position.

It probably tells us more about MEW: those who MEW even in the 60+ age bracket, have comparatively large outstanding mortgages, and are probably using MEW to meet existing loan repayments, in the process gradually "spending" all the equity they own in the property. Loans used to pay interest on other loans.

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The intergenerational war has begun and the Baby Boomers are on the losing side.

In the next few years, we young folk will take the Boomers' houses for a pittance because they all have to downsize for retirement. Nevertheless, there are still more people below retirement age than above it. So we will rewrite laws to raise the retirement age and deny them all but the tiniest pension. Politicians of our generation - think Obama, Cameron - know that to do otherwise is to commit economic suicide.

Quite fittingly, the most selfish generation in history will end their days living in bedsits and working at McDonald's.

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The intergenerational war has begun and the Baby Boomers are on the losing side.

In the next few years, we young folk will take the Boomers' houses for a pittance because they all have to downsize for retirement. Nevertheless, there are still more people below retirement age than above it. So we will rewrite laws to raise the retirement age and deny them all but the tiniest pension. Politicians of our generation - think Obama, Cameron - know that to do otherwise is to commit economic suicide.

Quite fittingly, the most selfish generation in history will end their days living in bedsits and working at McDonald's.

Selfish generation?? My parents will retire on a pittance, guaranteed, despite 50+ years working. Gold plated public sector deals are not available to everyone. They like me work hard and save, put in a private pension scheme. Reward? Abuse from dicks like you.

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The intergenerational war has begun and the Baby Boomers are on the losing side.

In the next few years, we young folk will take the Boomers' houses for a pittance because they all have to downsize for retirement. Nevertheless, there are still more people below retirement age than above it. So we will rewrite laws to raise the retirement age and deny them all but the tiniest pension. Politicians of our generation - think Obama, Cameron - know that to do otherwise is to commit economic suicide.

Quite fittingly, the most selfish generation in history will end their days living in bedsits and working at McDonald's.

Oh yes (rubbing my hands in glee) this would be quite a fitting end to there selfishness.... to deny your children everything due to simple GREED and need to hang on to POWER will be there undoing in the end.

KARMA will always catch up to you in one way or another....... :angry:

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It's a very selective survey! It only includes older people who are applying to (who need to) borrow money through equity release with this one company. The selection bias in favour of those with financial problems/heavy outgoings is probably 100%, so it can't be extrapolated to show that all pensioners are in this position.

It probably tells us more about MEW: those who MEW even in the 60+ age bracket, have comparatively large outstanding mortgages, and are probably using MEW to meet existing loan repayments, in the process gradually "spending" all the equity they own in the property. Loans used to pay interest on other loans.

Large enough sample to be credible IMHO; 4,500 is huge by sample standards. It concerns those in debt, not pensioners as a whole group, that mortgage debt for the older generation is growing by 20% year on year is not misleading, it's frightening. This has been earmarked by some brokers as the next easy money, lifetime/equity release/deathbed stuff. They generally only take 20-30% equity loans on previously unsecured property, that customer profile is set to go exponential over the next decade which is why nice guys like the Pru are getting in there fleecing these silly sheep asap. "You've earned it, all that money tied up in your property, why not enjoy it, visit the kids in Aussie, have that saga cruise of a lifetime "....<_<

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Survey reveals mortgage debt for older generation grows 20% year on year

The findings, from analysis based on 4,507 people aged 55+ who released equity in their home with Key Retirement Solutions in 2007

But this survey was conducted entirely amongst proven MEWers, are they really representative of boomers as a whole? There's about a third of home owners that don't have any outstanding mortgage at all, I'd have thought they'd have been predominantly older home owners approaching or actually in retirement.

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But this survey was conducted entirely amongst proven MEWers, are they really representative of boomers as a whole? There's about a third of home owners that don't have any outstanding mortgage at all, I'd have thought they'd have been predominantly older home owners approaching or actually in retirement.

'tis representative of those in the older generation who take on debt, not those of retirement age as a whole. Those in debt as a group are taking on more and more debt -20% more a year. That group you mention (owning outright) is a huge demographic target for lenders and is being erorded on a daily basis as those of that age refuse to simply eek out a poor retirement.

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CL, this shouldn't come as a huge surprise; I've worked in several different companies over the last few years and the amount of boomers I've worked with who have BTL portfolios is shocking. I'd guess that at least one in five proper "boomer generation" colleagues have dabbled in the market.

I don't know how representative that is but it seems to me that their retirement dates are likely to be a few years later than expected.

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Selfish generation?? My parents will retire on a pittance, guaranteed, despite 50+ years working. Gold plated public sector deals are not available to everyone. They like me work hard and save, put in a private pension scheme. Reward? Abuse from dicks like you.

As a generation, the Boomers are selfish and self-obsessed - although of course some individuals may be an exception.

Bridget, if your parents are homeowners they will have seen the value of their properties skyrocket and anyone would be blind not to notice the effect on younger generations. Unfortunately, if the statistics about middle-aged BTLers are right, as a generation the Boomers have been willfully blind and greedy. Nobody deserves a second pension if it means denying economic rights to people who deserve them.

Like the Boomers before me, all I want is the chance to buy a house at a reasonable price. Who are they to try to stop me?

Edited by Woodworm
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  • 10 months later...

My parents have had to go down the route of obtaining an equity release plan. A lot of the banks weren't very helpful and seemed to make things really complicated. I would advise going with a company that specialise in equity release so you recieve a better service and a much better price. A useful and helpful website for information on equity release visit:

http://www.agepartnership.co.uk

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It's a very selective survey! It only includes older people who are applying to (who need to) borrow money through equity release with this one company. The selection bias in favour of those with financial problems/heavy outgoings is probably 100%, so it can't be extrapolated to show that all pensioners are in this position.

Spot on. It's like doing a survey on illness from data only collected in doctor's surgeries and hospitals.

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Anyone who does mortgage equity release is going to be ripped off. They get £30,000 out, and thanks to the miracle of compound interest, lose the whole £350,000 house after 17 years. Stupid and cruel for anyone to let an elderly relative do this.

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Perhaps if you spent less time dicking around with internet forums and doing some productive work, you'd find oursleves more valued by your employers. Stop wasting money on stuff like mobiles, gyms and Walter Mitty cars and you'd more resources to invest. You could always take a second job and slog away for years paying down your mortgage. It only took me 20 years to be mortgage free and another few to save enough to live on in my retirement. Just work more and spend less, it's easy unless you're a lazy dosser.

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You could always take a second job and slog away for years paying down your mortgage. It only took me 20 years to be mortgage free and another few to save enough to live on in my retirement. Just work more and spend less, it's easy unless you're a lazy dosser.

Yeah, slog away for your entire life for the sake of a pile of bricks, and to make sure that bankers are able to live in luxury! Cracking idea, gromit.

Stuff that, I've only got one life, and it's not going to be wasted on a boring-ass obsession with money.

If HPC stops tommorow and we get another decade of 10%+ rises, I'm leaving this country, will have no other rational choice.

Edited by DementedTuna
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Perhaps if you spent less time dicking around with internet forums and doing some productive work, you'd find oursleves more valued by your employers. Stop wasting money on stuff like mobiles, gyms and Walter Mitty cars and you'd more resources to invest. You could always take a second job and slog away for years paying down your mortgage. It only took me 20 years to be mortgage free and another few to save enough to live on in my retirement. Just work more and spend less, it's easy unless you're a lazy dosser.

If it is really all about working hard and benefiting, why couldn't you just keep the money from working rather than 'going all around the houses' (pun intended) making an 'investment', whose purpose is to squeeze other people out of being able to work and live comfortably, so you could then get the money you originally worked for back? The thing is it has little or nothing to do with working hard - passive real estate profits are a gargantuan, dingly dangly freebie, that come directly at the expense of people who work.

Edited by Stars
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If it is really all about working hard and benefiting, why couldn't you just keep the money from working rather than 'going all around the houses' (pun intended) making an 'investment', whose purpose is to squeeze other people out of being able to work and live comfortably, so you could then get the money you originally worked for back? The thing is it has little or nothing to do with working hard - passive real estate profits are a gargantuan, dingly dangly freebie, that come directly at the expense of people who work.

Some of us spent the proceeds from the good years making sure we didn't have huge debts and paying off the mortgage. Others went on expensive holidays,sent the kids to fancy schools,bought the missus diamond necklaces etc.It's just the way it is.

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Anyone who does mortgage equity release is going to be ripped off. They get £30,000 out, and thanks to the miracle of compound interest, lose the whole £350,000 house after 17 years. Stupid and cruel for anyone to let an elderly relative do this.

A harsh lesson will be learnt by many, that this money was never profit but in fact debt.

MEWing was incredible dumb and not good for the economy.

I have no problem with MEWing for investment ie starting businesses etc... MEWing to buy a new car, go on holiday, paying for private schooling was just stupid and foolish.

Many will learn unfortunately how stupid and foolish it was, however the ripple effect from this will be felt far and wide.

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But day by day we are showing the oldies and the youngies and the inbetweenies that saving is wrong. that savers will be punished. and that savers may as well piss it up the wall for all the good it does them.

Means tested benefits mean you can be just over and miss out on heaps of stuff. Why save? Why not fritter it away on all the nice tat and luxury holidays you want.

The poor get it all paid for and don't have to sel their family inheritance - so give a cheer and get out there and spend spend spend like there's no tomorrpw that you're paying for!

I think this is the worst thing about the damage gordon is doing at the moment. This isn't just a short term thing. This is long term - the young are learning to spend and go bust. The oldies aren't going to want to miss out on the party.

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