Half of over-40s believe they will be paying a mortgage or rent in retirement

Half of over-40s believe they will still be repaying their mortgage (31 per cent) or paying rent (20 per cent) when they retire.

New research from specialist insurer Partnership reveals that a significant number of people will still be making mortgage repayments when they retire, at an average of £514 per month or 47 per cent of retirement income.

In addition, with 35 per cent of households in England living in social or private rental accommodation, a number of retirees will need to meet these costs in later life (average of £399 per month or 37 per cent of retirement income).

As people age and either purchase property or repay their mortgage this changes the number who expect to be meeting these costs in retirement but 18 per cent of 66- to 70-year-olds still expect to need to make rental payments and 15 per cent expect to be repaying their mortgage.

Proportion of people who believe they will be paying rent/mortgage in retirement:

Mark Stopard, head of product development at Partnership, says:

“Most people aim to own their own home by the time they retire but the trend towards remortgaging, purchasing later in life and being kept off the housing ladder by high house prices means that this is out of reach for almost a third of people.

“This may see some people taking advantage of the opportunity to work longer but for some people – especially those with health issues – this is simply not an option.

“While those in private or social rental accommodation need to focus on securing sufficient income to meet these costs, those who are still repaying their mortgage have more options.

“Either they can use part or all of their pension to repay the borrowing – although this is likely to significantly impact on their later life income – or they can use equity release which can mean they will leave less to their families but face less financial pressure.”