45% of those who have a mortgage say it’s taking longer to clear their loans
Over one in four, or 27% of those born from 1965 to 1980 – collectively called as Generation X – are not confident that they will be able to pay off their mortgages before reaching the age of 67, new research from retirement specialist Just Group has revealed.
The study, focused on the Gen X or ‘Generation Anxiety’, underscores the financial concerns within the age group, highlighting potential challenges in meeting mortgage obligations.
Breaking down the figures, 13% of Gen X members firmly believe they will be unable to settle their home loans by the time they become eligible for the State Pension, with an additional 14% expressing uncertainty regarding their repayment capabilities.
Geographical disparities further compound these concerns, particularly for London residents. The research indicates a noteworthy contrast between London and the rest of the UK, with 26% of Gen X Londoners holding mortgages expressing doubts about repaying them before the age of 67, compared to the national average of 13%. This discrepancy suggests a pronounced impact of higher house prices in the capital on mortgage repayment expectations.
The study identifies the escalating cost of borrowing as a contributing factor to these apprehensions. Among Gen X individuals aged 42 to 58 with mortgages, 45% reported that it is taking them longer than anticipated to pay off their loans.
The most prevalent reason cited for this delay, by 34% of respondents, is the need to extend the mortgage term to reduce monthly payments. Additionally, 32% extended their mortgage term for home improvements, while 23% did so in response to increased interest payments.
“About three-quarters of the Gen X cohort own their own homes, but many are struggling to clear their mortgage within the expected time frame,” commented Stephen Lowe, group communications director at Just Group. “This group find their finances stretched and are faced with the unenviable choice of either clearing the mortgage or saving for a pension.
“People’s budgets are being squeezed as they juggle competing pressures. As a result, we are seeing growing anxiety among this demographic that many will approach retirement still carrying the burden of making their mortgage repayments. This is felt more acutely among those in London, where property prices are higher and nearly double the national average of Gen X homeowners with a mortgage worry that they will still be saddled with a mortgage as they enter retirement.”
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