ERC poll shows interest-only big problem for retirees

Just under half of visitors to the Equity Release Council’s website thought that retirees with interest-only mortgages would be a “huge problem” in the next five years.

In a spot poll on the trade body’s site only 7 per cent of visitors didn’t think it was an issue at all, with 30 per cent thinking it was a real concern and a further 20 per cent a growing problem.

The trade body also asked how people thought the best way to deal with an interest-only mortgage. Nearly half favoured using equity release at 44 per cent, whereas a considerably smaller percentage suggested down-sizing as being a good option at 28 per cent. Only 13 per cent said that consumers should consider dipping into their savings to repay their borrowing.

Over 100 people responded to the poll. .The ERC’s direct general Andrea Rozario says that with regular remortgaging, people failing to set up repayment vehicles and underperformance of investments, an increasing number of people face paying off their mortgage after they retire.

She says: “While this is okay for some with sufficient income, most don’t want to worry about this in their later years.

“Whether someone fearing this issue is approaching retirement or has in fact already retired – it is always wise to explore their options and speak to an adviser, so that they can decide what the best option for their situation is. Equity release; down-sizing or speaking to family members are all options which can be explored.”