A report on the Gen X demographic from Just Group revealed that homeowners were unsure if they would clear their debt once they are eligible to receive the state pension.
Some 27 per cent of the 1,057 people polled did not feel they would have their mortgage paid off before they turned 67, while 13 per cent were certain they would still be burdened with the debt. Around 14 per cent of respondents were unsure if they would have cleared the mortgage.
There was less confidence among those living in areas with higher property prices, as Just Group’s research found that 26 per cent of respondents in London said they would not pay their mortgage off before they reached retirement age. This was higher than the 13 per cent response for the national average.
Gen X borrowers extending mortgage terms
When asked why they would not be able to pay off the mortgage by the age of 67, 34 per cent of Gen X respondents said it was because they extended the mortgage term to make payments affordable. This was the most common response.
Some 32 per cent said they extended the mortgage term for home improvements and 23 per cent said they did so because of increased interest rates.
Stephen Lowe, group communications director at retirement specialist, Just Group, said: “About three-quarters of the Gen X cohort own their own homes but many are struggling to clear their mortgage within the expected time frame. This group find their finances stretched and are faced with the unenviable choice of either clearing the mortgage or saving for a pension.
“People’s budgets are being squeezed as they juggle competing pressures. As a result, we are seeing growing anxiety among this demographic that many will approach retirement still carrying the burden of making their mortgage repayments.”
He added: “This is felt more acutely among those in London, where property prices are higher and nearly double the national average of Gen X homeowners with a mortgage worry that they will still be saddled with a mortgage as they enter retirement.”
