Pensioners in Britain are racking up increasing levels of debts as higher house prices mean families take longer to get on the property ladder (and less time to pay off the mortgage debt) and people have to borrow more to cover care costs or help their children financially.
The Financial Conduct Authority (FCA) has predicted from research that nearly 1.5 million mortgage holders aged between 35 and 64 will not have paid off their home loan debts before they retire.
The mortgage debts of over 65’s are predicted to double over the next 13 years from just over £20 billion to £40 billion by 2030, the FCA has stated.
As incomes tend to fall in retirement, those who have debts may struggle to service their loans and may need to sell their homes or alternatively carry on working past State Retirement Age.
To assist older lenders banks need to prepare by reviewing policies on upper age limits for loans as well as making such information clearer the FCA state.
They go on to say that;
“There are risks that older consumers’ financial services needs are not being fully met, resulting in exclusion, poor customer outcomes and potential harm”.
“Generalised approaches to dealing with older consumers may stereotype, patronise or offend. This can be challenging for firms operating at scale. It is vital that firms are given flexibility to use their own judgment.”
If firms aren’t given the flexibility and scope to deal with an older age cohort of the population then this generation will find it increasingly difficult to deal with having to carry on paying their mortgage in retirement on a greatly decreased income. It will only increase the chances of retirees falling into a spiral of debt and possible insolvency.
If you have found yourself struggling with debts you cannot pay back and have retired or are approaching retirement age, speak to a specialist solicitor who can advise you on managing your debts and get your finances back under control. Call today on 0845 287 0939 or submit your enquiry online.
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