Millions of middle aged homeowners fear they will not be able to pay off their mortgage before they hit state pension age.
More than a quarter (27%) of those owners aged between 42 and 58 expect to be paying their monthly repayments after they turn 67.
The mortgage repayment struggles of “Generation Anxiety” have been highlighted in the third data release of a new research series from retirement specialists Just Group.
13% firmly believe they will not have the money to pay off their mortgage with a further 14% unsure.
The growing cost of borrowing appears to be contributing to these repayment fears.
The growing cost of borrowing appears to be contributing to these repayment fears.
Nearly half (45%) of Gen X – those born between 1965 and 1980 – who have a mortgage are finding it is taking longer to pay off than they had hoped.
When asked why, the most common reason (34%) was they had needed to extend the mortgage term to reduce monthly payment costs.
A further third (32%) had to extend the term to pay for home improvements, and more than a fifth (23%) had extended the term to cut their monthly repayments.
Stephen Lowe, group communications director at retirement specialist, Just Group, said: “About three-quarters of the Gen X cohort own their own homes but many are struggling to clear their mortgage within the expected time frame.
“This group find their finances stretched and are faced with the unenviable choice of either clearing the mortgage or saving for a pension.
“People’s budgets are being squeezed as they juggle competing pressures.
“As a result, we are seeing growing anxiety among this demographic that many will approach retirement still carrying the burden of making their mortgage repayments.
“This is felt more acutely among those in London, where property prices are higher and nearly double the national average of Gen X homeowners with a mortgage worry that they will still be saddled with a mortgage as they enter retirement.”
The research also highlights a sharp divide between those who live in London and those in the rest of the UK, indicating the impact that paying higher house prices can make to mortgage repayment expectations.
Double the number of Gen X (26%) London residents with a mortgage said they did not expect to repay their mortgage before 67 compared to the national average of 13%.
