A study of 5,000 UK adults’ financial experiences also shows 43% of mortgaged homeowners under the age of 40 relied on financial help from family or friends to buy their first home
45% of mortgaged homeowners aged under 40 got onto the housing ladder ‘much later’ than they expected, shows a new research by the Equity Release Council (ERC).
A study of 5,000 UK adults’ financial experiences also shows 43% of mortgaged homeowners under the age of 40 relied on financial help from family or friends to buy their first home. In comparison, just 23% of those aged 40+ relied on similar support to get onto the property ladder.
The rise of ‘delayed homeownership’ means having a mortgage in later life is likely to become more usual for consumers. 32% of homeowners with a mortgage are unsure if they will become ‘mortgage free’ before they retire or have already ruled it out. 20% feel the idea of retiring ‘mortgage free’ is unrealistic.
Instead, the Council’s research highlights attitudes to secured debt in retirement are changing, as nearly one in four mortgaged homeowners (24%) say they don’t mind if they are still paying off their loan in later life. 47% believe their generation’s attitude to debt in later life is more accepting than their parents, with those aged 25-34 most likely to feel this way (52%).
The findings show that 70% of mortgaged homeowners feel comfortable with their current level of mortgage debt, rising to 75% of those aged 50+. Many also feel taking out a mortgage in later life can benefit them: 32% see it as a way to provide money to improve their lifestyles, while 31% see it as a way to access funds to help out family members.
33% feel financial services providers are getting better at offering mortgages to people in retirement. However, the need for clear information is apparent as 36% say they are confused about what mortgages are available to people in later life. The Council’s research suggests confusion is highest among the under-40s (42%).
Jim Boyd, CEO of the Equity Release Council, comments: The realities of delayed homeownership are prompting people to reassess their attitudes to secured debt in later life. There are clear signs that paying a mortgage in retirement is no longer taboo: for many people, it can make the difference between financial hardship and enjoying a more comfortable lifestyle while also supporting family members.
He said: The ability to use property wealth to improve your retirement experience is a choice many homeowners have earned through years of paying a mortgage and building an asset. Lifetime and retirement mortgages allow people to make the most of property as a source of wealth as well as a home. Our findings suggest later life lending products are likely to be even more important for future generations of retired homeowners than they are today.