One in five people over 55 still need to repay their mortgages and owe an average of over £65,000 according to Aviva.
The company says the findings of its Real Retirement Report are a worrying sign of the impact of the economic climate on today’s older generation.
In a consultation paper published last June, the regulator said lenders should consider an applicant’s ability to repay at the outset of the mortgage by predicting future income.
An FSA spokesman says: “We believe it is important that a lender must ensure that a mortgage is affordable when it runs into a person’s retirement. This does not necessarily mean that a mortgage should not be able to run into a person’s retirement.”
In Aviva’s report, the company also claim that many people over 55 have considerable borrowings on credit cards, personal loans, overdrafts, store cards and hire purchase agreements which they need to repay from fixed incomes.
The report adds that women over 55 continue to earn significantly less than men and where savings of men over 55 have risen, savings of women have fallen. The proportion of non-savers over 55 has increased from 39 per cent in February 2010 to 43 per cent in the same month this year.