Britain’s pensioners are racking up ever-growing levels of debts as higher house prices mean families take longer to get on the property ladder, and people have to borrow more to cover care costs or help their children financially.
The mortgage debts of over-65s are set to double over the next 13 years from £20.1bn to £39.9bn by 2030, the Financial Conduct Authority believes.
Equity release is booming, with older people withdrawing almost £8m a day from their homes, it emerged this week. And there are more schemes than ever available to over-55s looking to unlock the value tied up in their property so they can, for example, pay off their interest-only mortgage.
Further increases in the state pension age could push it to the point where many working people die before qualifying for it, MPs have warned, in a report that calls for the end of the “triple lock” guarantee on pensions.
The Commons work and pensions select committee report on intergenerational fairness, published on Tuesday, claims that financing the triple lock in future will not be possible without increasing the state pension age to 70.5 years – leaving men in Manchester, Birmingham, Bradford and Blackpool dying on average before they receive their state pension.
Previous limits on making repayments past 75 are slowly being revised, but borrowers must still have proof of income
Downsizing your home to give yourself an income in retirement is unrealistic, according to the former pensions minister, Steve Webb.
As many as three million people who are planning to rely on their homes for a pension are in for a shock, he said.
In a report for the insurance company Royal London, he said most people doing so would experience a slump in living standards on retirement.
He said the idea amounted to a "downsizing delusion".
Almost three quarters of pensioners in the UK who have an investment property said they would struggle to make ends meet if they didn’t have the income from their buy to let, new research shows.
Overall 72% would struggle and 81% of those aged over 65 said that their properties provide an important, even vital, boost to their retirement income, according to a poll carried out by Responsible Equity Release.
The poll also found that 92% are worried about the changes to mortgage interest tax relief and the impact on the profit they make from their investment property.
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