Opening Hours

Open until 5:00pm today

Opening Hours

  • Monday - Thursday

    9:00am - 8:00pm

  • Friday

    9:00am - 5:30pm

  • Saturday

    9:00am - 5:00pm

  • Sunday

    Closed All Day

Our Address

Key, Baines House,

4 Midgery Court, Fulwood,

Preston, PR2 9ZH

UK FREEPHONE

0808 252 9170

Debt threat for older homeowners

11 September 2019

Up to half of older homeowners are using equity release to repay debt as they struggle to meet payments, new analysis* from UK’s leading independent equity release adviser Key shows.
 
Analysis of customer data suggests that 30% of people are using equity release to repay unsecured debt while 20% are using it to repay mortgages.  Debt is a growing issue with customers aged 55-plus owing an average of £10,319 on credit cards and £13,578 on loans. The UK average for people with unsecured debts is £11,830 meaning that some over-55s could have more than double the average amount of unsecured debt.
 
The biggest single debt burden identified is outstanding mortgages – customers clearing home loans on average owe £87,181, the data shows.   Further analysis suggests that the debt issue spreads across age group – customers in their 70s owe an average of £9,773 on credit cards compared with £10,926 for homeowners in their 60s. However, even some customers in their 80s owe money on plastic with average debts of £10,443.
 
A significant impact of carrying debt into retirement is the cost of regular repayments – customers are paying off an average £300 a month on credit cards; £282 on loans and £586 in mortgage repayments. That takes a substantial bite out of monthly income with those with credit card debt needing to use an average of 40% of the state pension (c. £730 per month) on repayments before meeting other regular costs such as housing, utilities and general living expenses.
 
The table below shows the average debts and monthly repayments.
 

DEBT AVERAGE OWED AVERAGE MONTHLY REPAYMENT
CREDIT CARDS £10,319 £300
LOANS £13,578 £282
MORTGAGES £87,181 £586
 
Will Hale, CEO at Key said: “Juggling debt at any age can be stressful but with typically a fixed income, older people are likely to find it even more stressful than most.  Clearly people in their 70s and 80s are having to balance how to keep up these repayments alongside maintaining their standard of living in retirement.
 
“For homeowners, it makes sense to look at downsizing, equity release or other later life lending options to clear their debts and set them up for a more comfortable and less stressful retirement.  Good independent expert advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families.”
 
Anyone looking to release equity from their home can get Key’s independent guide to equity release by calling 0800 531 6027 or visiting https://www.keyadvice.co.uk/equity-release/request-a-free-guide
 
ENDS
Notes to Editors
* Key market data for 2019 H1. The Monitor uses Key’s data to reflect the market as a whole. The data reflects both members and non-members of the Equity Release Council, and provides the most detailed analysis of the equity release sector.  The figures reflect new customers and the equity they released rather than any ongoing withdrawals via products such as drawdown.
 
Lee Blackwell
Director of Public Relations and Public Affairs
Key Retirement Group
07384511140
E-mail: [email protected]
 
Rachel Mann
Key Retirement Group
01772 508322
E-mail: [email protected]
 
Citigate Dewe Rogerson
Katie Ormrod
0207 025 6440
E-mail: [email protected]
 
 
About Key:
  • Part of Key Group, Key is an independent equity release adviser for the over 55s committed to high levels of customer service and the belief that good advice is key.
  • There are three main products that Key offer: equity release, later life mortgages and estate planning. As its customer base has grown, its products and services have been developed to keep up with its reputation.
  • With customers at the heart of everything they do, Key has helped over one million people with financial planning in the UK and has maintained an ‘Excellent’ level on the independent review site Trustpilot with more than 14,600 reviews
  • Based in Preston, Key is committed to being independent, transparent and straightforward.