Over 12.5 million people will have a mortgage when they retire as people enter the housing market and switch to new terms later in life, according to research from Prudential.
The data shows that 42 per cent of first-time buyers are now over 35 years (2.55 million people) and 21 per cent are over 45 (1.27 million people), pushing increasing numbers into the prospect of paying off their mortgage in retirement.
Over 10 million people aged 35 to 65 have started a new mortgage term at least once when they moved home and 46 per cent of homeowners are using or planning to use their home for retirement funding.
But Pru says people's attitudes are changing with the new realities and they are less concerned about owning their home outright, with only 53 per cent saying it very important to own their home outright.
Equity-release plans director Ali Crossley says: “The reality is that people are still going to be paying off their mortgage as they hit retirement, at a time when their average income drops by almost £4,200 and other financial pressures come into play. People reaching retirement age can expect to live for 20 years and unless they start to plan and save more, financial pressures will become tougher in retirement.”