One in seven expect to be paying off mortgage into their 70s
One in seven UK homeowners say they will still be paying off their mortgage at the age of 70, according to a survey.
The Aegon study found 14 per cent of those surveyed were expecting still to be making payments on their home at retirement age. More than 40 per cent said they would likely still be renting at 70.
More than 700 people aged between 18 and 64 were questioned in the survey, which also predicted an increase in “lifetime renters”.
Steven Cameron, pensions director at Aegon, said a combination of homeowners getting on the housing ladder, higher house prices and longer borrowing terms were the main factors in the response.
He said: “Paying off your mortgage in time for your 70th birthday is now far from a given. Inflated property prices mean those getting onto the property ladder are doing so at later ages and are borrowing more for longer. Those left with an outstanding mortgage on their property face the prospect of either budgeting mortgage payments into their retirement or alternatively continuing to work.
“We know that one in four people expect to still be working at 70, but not everyone will be fit enough or want to do so.”
Mr Cameron continued: “As younger generations increasingly fail to get onto the property ladder, renting a home becomes the long-term plan.”
The results of the survey came after a Freedom of Information request by insurer Royal London found pensioners paid a total of £24 billion in income tax in 2015/16.
According to the findings, Scottish pensioners paid as much as £1.7bn of the total bill, more than Wales and Northern Ireland combined. The tax paid by pensioners would be on various sources of income such as employment, self-employment and property.
Royal London found that between the mid-1990s and the mid-2010s, the number of taxpayers aged over 65 had nearly doubled from 3.32 million in 1995/96 to 6.49 million in 2015/16 – the most recent year for which detailed figures are available.
It is estimated that the number has broadly stabilised since then and stands at around 6.37 million in 2018/19, Royal London said.
Sir Steve Webb, director of policy at Royal London, said: “Many people might assume that once you retire you cease to be of interest to the taxman, but these figures show that this is very far from being the truth.
“The number of tax-paying pensioners has nearly doubled in the last two decades and with talk of requiring pensioners to pay national insurance on earnings, the older population may think of themselves as ‘generation still taxed’.”