Retirees are consuming 28 per cent of their annual income on outstanding mortgages, according to research by Key Retirement Solutions, and could benefit from an equity release plan.
KRS reports 25,000 over 65s households have mortgages. Monthly repayments of an average mortgage of £32,000 stand at £344, an annual expense of £4,128, according to KRS. With an average income of retirees standing at £14,600 per year, these payments amount to 28 per cent of mortgaged pensioners' annual income.
With the rise in interest rates in the past six months, it is estimated a pensioner's mortgage bill will increase by 1.3 per cent on average, or £193 per year.
KRS says a retiree could reduce their existing mortgage debt and their outgoings by £4,128 pa, as well as benefit from a cash lump sum if they consider equity release.
KRS managing director Colin Taylor says: “Many retired people are suffering from reduced disposable incomes because they are trying to clear an outstanding mortgage in retirement. However, with the value of equity held in property by the over 60s now calculated at over £1tn, there is tremendous scope for today's retirees to use equity release to clear an ongoing mortgage debt and boost their disposable income.”