Many pensioners are using equity release to pay off their mortgage debt, new research suggests.
British pensioners have tens of thousands of pounds of mortgage debts and many are using equity release to pay for it, a new study has found.
Research by Key Retirement Solutions found that between 2007 and 2008 there was a 39 percent increase in the number of pensioners who contacted the company to use equity release for this purpose. Additionally, the firm found that the 65 to 69 age group had average mortgage debt of £34,272, while this figure grew to £48,442 for the over-70s.
The company suggested that this debt could be the result of two possibilities: pensioners choosing a mortgage which would last into their retirement, or the failure of an investment vehicle. Key Retirement Solutions group director Dean Mirfin said the findings could be representative of a wider problem.
"If [the findings] are even partly reflective of the scale as a whole, today's and tomorrow's pensioners face a retirement in a position of debt which they had maybe not anticipated," he explained.
"It does not therefore come as a surprise that many of those faced with this scenario are looking to equity release as a solution to eradicate their mortgage debt to free up much needed income to further enhance their retirement years."
