Mortgages, retirees worst nightmare

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Mortgages, retirees worst nightmare

A report made public recently says that one in three middle-aged homeowners will still be making mortgage payments even after hitting retirement. The report derived from a recent study also concludes that more than a million homeowners will be unable to clear their debt before they hit 65.

This loud caution comes at a time when many are getting ready for sharp drops in their income after retirement.

The report argues that more than a million people overburdened by the payments will have been unable to do away with their mortgage debt before they get to 65.

It is said that quite a number of future retirees will desperately wallow through the payments more than the present generation following the collapse of final salary pension schemes after Labour’s 1997 pension tax raid.

An analysis carried out for large mortgage and finance reviewer website revealed that there are about 1.4 million homeowners over the age of 55 paying mortgages which have at least ten years left to run on them.

The report added that the average mortgage debt currently stands at £55,046 for those above 55 years, and the average time the mortgage still has to run is slightly less than eight years. Mortgages falling in that scale are payable at a £725 rate a month.

According to the marketing director for Impartial, Karen Barrett, many of those who are in the middle age bracket are stumbling upon the harsh reality of still having a gruesome mortgage debt close to or even in their retirement age and beyond.

She added that it is of great importance that the next generation of homeowners do their best to steer clear of their debts, since it is foreseen that even those that should be debt-free by 65 will still have sizeable obligations.

Besides being weighed down with mortgage loans, a number of those who go into retirement will also have a host of other debts left on their credit cards and other consumer loans.

It is also predicted that soaring family responsibilities will be a hard nut to crack for these retirees. Furthermore, it has been noted of late that quite a number of parents are still supporting their adult children way into their retirement age. In some cases, they are forced to give some assistance to their children, for the financing of the education and child care of their grandchildren. With it becoming two expensive for many first time buyers to get onto the property ladder, young home buyers are increasingly turning to mum and dad for that first vital financial push.

In an astonishing report made public last year, it is said that one in five grandparents are paying childcare bills for their children. As a matter of fact, the report stages that those grandparents who do help pay an average or £1,200 per year towards nursery of childcare provision.

In another report from the Office for National Statistics released earlier this week, it was clearly realised that the retired living on occupational pensions have had an increase in their income by more than a third since the mid-1990s.

Additionally, it has been confirmed that the spread of good pension schemes among employers in the 1950s and 1960s was indeed the main reason for pensioner prosperity.

However, the fall of traditional final salary pension schemes and their replacement by less generous defined contribution schemes means those nearing retirement in about a decade are prone to be much less well off in retirement.