But help is at hand
The average age people expect to clear their mortgage is close to 60, but more than one in six reckon they will still be paying it off in their retirement years, new research reveals. Among over-55s who still hold a mortgage, more than five million people believe they will be running up to retirement without having repaid it, with a growing number having additional debts weighing them down.
According to the latest study from Aviva, around two thirds of British people admit to having debt weighing them down, while 9% of those surveyed ‘haven’t got a clue’ how much they owe in outstanding debts and worryingly this figure rises to more than one in six of those aged 45 and over.
Although it is not uncommon for people to enter retirement with some level of debt, such as credit card, mortgage debt or car loans, this debt can have a significant impact on retirement plans and financial security as it can lead to increased stress and reduced income in retirement. Interest rates have risen to levels we haven’t seen since 2008 – and are expected to rise further. The cost of debt is now centre stage, and millions may be having to rethink their retirement plans.
Starting to think and plan further ahead as early as possible is a small step that can make a big difference in the long-term. Individuals can take some positive actions to reduce their debt before entering retirement, such as consolidating their debt, paying off high-interest loans or switching to a cheaper rate, alongside reducing unnecessary expenses or taking out a debt management plan.
Also, if appropriate, people could work with a financial adviser to create a full retirement plan that takes their debt into account and ensures that they have enough income to cover their expenses and enjoy their retirement years.
At Wilsons, we are regularly contacted by house owners needing to consolidate their finances as the time of their retirement approaches. ‘Downsizing’- selling their existing property to buy a cheaper one can be the answer in which case we can be of direct assistance. Others, wishing to avoid taking this step, often find the solution by consulting professional financial consultants who can offer a multitude of plans to overcome the worries of the likelihood of forthcoming hardship.
We have built tried and trusted relationships with experts in this field who have come to the rescue of many of our clients, alleviating their worries and enabling them to embark upon their retirement years with excitement rather than fear. If you or anyone you may care about would like further advice from us about downsizing or an introduction to a financial advisor they can trust to help put their finances back on a firm footing, call us on 01823 324324 and we’ll be very pleased to assist.