One in six people in Britain are unlikely to pay off their mortgages by the time they turn 65 — the age people aim to retire.
According to a report by financial services firm Hargreaves Lansdown, which surveyed 2,000 people with pollsters Opinium, another 9% say they have no idea when they will pay off their mortgages.
“65 is the new 50, but not in a good way,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown. “Because while previous generations might be footloose and mortgage free by their 50s, increasingly we’re saddled with debts as we head into retirement.
The group says that the average age people expect to repay their mortgage is 57-and-a-half years. However, there is a distinct generation gap when it comes to optimism over paying off their property loans.
The poll showed that 80% of 16- to 34-year-olds expect to pay it off by 65 — even though, 40% of first time buyers in 2017 will still be repaying at 65, says regulator Financial Conduct Authority.
“Higher property prices and more people in higher education mean we’re buying later and borrowing more for longer. We face more backwards steps along the way too – dipping into equity to support our offspring, dealing with the horror of an interest-only shortfall, or starting all over again after divorce,” said Coles.
Over a quarter of those aged 55 with a mortgage, expect to pay it over the age of 70 and 12% don’t think they’ll ever repay.