‘Tough decisions’ for households as figures show rise in later life mortgages
The financial challenges forcing pensioners to rethink retirement
- Later life mortgages for over-55s reached £5.2 billion in the second quarter of this year, representing a 3 per cent increase compared to the same period last year, according to UK Finance.
- A total of 33,130 new loans were advanced to older borrowers in the quarter, showing a marginal annual increase of 0.49 per cent.
- Concerns were raised by Mary-Lou Press of NAEA Propertymark that some homeowners might be making 'tough decisions' due to ongoing affordability challenges.
- While the value of new lifetime mortgages rose by 10.6 per cent to £520 million, retirement interest-only mortgages saw a decline in both volume and value.
- Clare Stinton from Hargreaves Lansdown noted that this growing trend of mortgages extending into retirement is reshaping financial planning for older age, particularly as many households have inadequate pension savings.