It might surprise you, but there are hundreds of thousands of pensioners across the UK still struggling to pay off their mortgages! This is a big issue for many retirees, who often find themselves stretched financially.
New research from the over-50s experts SunLife has shown that a shockingly high number of pensioners are still tied to their mortgages. Out of all the people over 65 in the UK, 7% are still paying off their mortgages – that’s over 500,000 people!
This means that for many pensioners, a big chunk of their income is still going towards their homes, leaving less for other things they might need or want in retirement.
Average Debt and Monthly Payments
On average, these pensioners owe £33,627 on their mortgages. With the current interest rates, they’re likely paying around £638 a month!
That’s a big chunk of a typical pensioner’s income, especially considering that the average homeowner retiree earns less than £30,000 a year.
Are You Feeling the Pinch?
If you’re one of the many retirees still paying off a mortgage, you might be feeling the strain on your finances. You might be wondering if there’s a way to free up some of that money for your retirement.
Equity Release – Could This Be The Answer?
One option to consider is “equity release”. This is a scheme where you can borrow money against the value of your home, without having to sell it. It allows you to release some of the cash tied up in your property.
This could mean that you can finally pay off that mortgage and have some extra money to enjoy your retirement. You can typically release between 20% and 60% of the value of your home, with the amount increasing as you get older.
But Before You Jump In, Consider This:
Equity release is a loan, so you will have to pay interest on the money you borrow. However, you don’t have to repay the loan until you pass away or move into long-term care.
It’s important to get financial advice before you consider equity release. It’s not right for everyone, and it could affect your inheritance or future financial options. You should also consider the arrangement fees and legal fees associated with this scheme.
Is It Right for You?
If you’re finding it tough to make ends meet in retirement, and you have a significant amount of equity in your home, equity release might be worth looking into. But always remember to talk to a financial advisor to make sure it’s the right decision for you.