Data collected by the Tax Incentivised Saving Association and KPMG shows that the average 55-64-year-old carries £36,500 of mortgage debt into retirement.
This equates to an estimated 10 per cent of their property value, says the research.
It also shows that the typical UK homeowner aged 64-75 owes £11,400 on their mortgage, and those over 75, £3,200.
The research also points out that, with defined benefit pensions schemes on the wane, the issue may become worse, with fewer than 40 per cent of retirees’ total pension wealth yet to be drawn being made up of defined benefits.
TISA retirement policy manager Renny Biggins comments: “It is clear that the long-held assumption that your mortgage would be paid off once you reached retirement is no longer a sure thing. Though mortgage debt is still reducing with age cohorts, UK households are having to rely on pension wealth and other assets to pay off their mortgages during retirement.”
“We are also now seeing consumers take out mortgages at a later age and for a longer term, as it takes longer to save for a deposit and it’s harder to afford repayments over the traditional 25 year term.
“The fact is many people about to enter retirement still have a sizeable chunk of their mortgage left to pay. Although auto-enrolment is a positive step forward, it remains a challenge for people in the UK to build up sufficient retirement savings.”