Data from the Bank of England indicates a rising trend in homeowners, especially those under 30, opting for mortgages that extend into their retirement years. This shift is largely due to escalating mortgage rates, leading many to choose longer repayment terms to manage costs effectively.
According to figures obtained through a Freedom of Information request by Sir Steve Webb, a former pensions minister and current partner at pensions consultancy LCP, the proportion of new mortgages set to conclude post-state pension age rose from 31% at the end of 2021 to 42% by the end of 2023.
Sir Steve Webb remarked on the findings: “The challenge of getting on the housing ladder is forcing large numbers of young home buyers to gamble with their retirement prospects by taking on ultra-long mortgages.”
He highlighted concerns that utilising limited retirement savings to settle mortgage debts could heighten the risk of poverty in old age.
The statistics show that nearly 300,000 new mortgages agreed upon over the past three years will extend beyond the borrowers’ retirement, with younger buyers particularly impacted.
