The trend for second marriages and having children later in life is continuing to impact the debt people are carrying as they get older. A Saga Equity Release Advice Service poll* of more than 10,600 over 50s has found that ‘second lifers’, people over 50 who have children with a new partner, have a bigger mortgage and more loan debts to face than those in the same age group without a new family.
The survey, carried out by Populus, shows that 16% of over 50s say they still have a mortgage. This figure rises to 26% for people who are going through a second marriage or long-term relationship. This group are also more likely to have outstanding debt on loans and, presumably, will be faced with the added burden of things like university fees for their children and grandchildren.
According to the research, more and more people are having children later in life. On average, of over 50s asked, 22% had their last child between 29 and 31 years old. Whereas almost one in 10 (6%) had their last child at the age of 41 or older. Recent ONS data suggests that the number of mothers aged 40 and over has more than quadrupled over the last three decades from 6,519 in 1982 to 29,994 in 2012.**
The Saga survey shows that over 50s, on average, have a mortgage debt of £62,836, much less than second lifers who have an average £73,881 mortgage to contend with. Not only that, second lifers have greater loan or ‘non-mortgage’ debts too. While 12% of over 50s have outstanding loan debts, the figure rises to 16% for second lifers, who have on average amassed £13,652 to pay off, compared to £10,830 for the rest of the over 50s.
Andrew Strong, chief executive, Saga Personal Finance commented: “The later-life parenting trend suggests that debt may remain a problem for many people as they get older. The endowment mortgage crisis and age discrimination in mortgage lending is impacting on some over 50s at a time when they may not be able to generate additional income to cover the cost of a mortgage or other debts. A tax-free lump sum provided by equity release could help relieve some of the pressure.”
Notes to editors
*Populus interviewed 10,657 Saga customers online, all aged 50 and over, between 11th and 16th April 2014.
**Births in England and Wales, ONS 2012
Saga Equity Release Advice Service
Equity release could offer a way to access money tied up in the home, by allowing UK homeowners aged 55 or over:
- To release a tax-free lump sum to help make the most of retirement
- The ability to release the cash when needed
- The freedom to spend the cash on almost anything.
The Saga Equity Release Advice Service, provided by Just Retirement Solutions Limited, aims to help customers decide if equity release could be right for them.
If someone purchases equity release through the Saga Equity Release Advice Service, they won't have to pay a fee for the advice. Equity release isn't right for everyone, so if the adviser believes it's not suitable, they will say so.