Average pensioner debt totals £36k

Published on

One in two over-65s owes money on mortgages, loans, cards and overdrafts, according to Key Retirement Solutions.

The equity release provider says the average pensioner taking out an equity release plan on the value of their home has debts of £35,991. Making repayments on the debts takes an average £297 a month from pensioner income – on the average retired household income of £12,412 a year after tax that equates to nearly 30% of income going on debt repayments.

The research was based on 3,501 customers who released equity from their homes during 2009. The results also show that the over 70s carry a greater level of debt than the over 65s with an average debt of £40,958 compared to £29,314.

Mortgages make up the biggest slice of the debt with 27% of pensioners still owing money on their homes. KRS says this in part is a reflection on the fact that an increasing number of today’s pensioners are living with a mortgage into retirement following an endowment or other investment shortfall. This situation is predicted to worsen as many endowments are due to mature with considerable shortfalls in the coming years.

The average still owed by the over 65s on mortgages is £35,441 rising to £52,576 for the over-70’s while the average credit card debt is £8,881 rising to £9,048 for the over-70s.

Dean Mirfin, KRS group director, said: “Property wealth has enabled the over-65’s in common with the rest of the population to comfortably afford to borrow. Servicing debt cannot continue to be a way of life once you no longer have an income to enable you to comfortably make repayments and clearly many pensioners will struggle to juggle loans

Latest POLL

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Bank of England expected to hold interest rates at 4.5% amid economic uncertainty

The Bank of England is widely expected to maintain interest rates at 4.5% when...

£6.5k bill for homebuyers who miss stamp duty deadline

Rent and mortgage spending rose 7.7% year-on-year in February, as more homeowners moved from...

Advice Guru partners with Pure Retirement to support broker education

Financial adviser learning platform Advice Guru has announced a new sponsorship partnership with Pure...

Nationwide ups LTV limits for interest-only and foreign national borrowers

Nationwide has announced changes to its mortgage lending criteria, increasing the maximum loan-to-value (LTV)...

Other news

Bank of England expected to hold interest rates at 4.5% amid economic uncertainty

The Bank of England is widely expected to maintain interest rates at 4.5% when...

£6.5k bill for homebuyers who miss stamp duty deadline

Rent and mortgage spending rose 7.7% year-on-year in February, as more homeowners moved from...

Advice Guru partners with Pure Retirement to support broker education

Financial adviser learning platform Advice Guru has announced a new sponsorship partnership with Pure...