250,000 OVER 50s SAY THEY WILL HAVE TO SELL THEIR HOME TO PAY OFF THEIR MORTGAGEThursday 2 May 2013
- A million over 50s' endowment policies aren’t enough to pay off their mortgage - Average shortfall is £49,000 - A quarter say they will have to sell their home to make up for the shortfall
250,000 OVER 50s SAY THEY WILL HAVE TO SELL THEIR HOME TO PAY OFF THEIR MORTGAGE
While most young people are struggling to get on the property ladder, some over 50s are clinging on to the last rung. Research by The Saga Equity Release Advice Service shows that more than a million* over 50s are set to face a shortfall when it comes to paying off their interest only mortgage.
Underperforming endowments have left those with interest only mortgages facing an average shortfall of £49,000. As one in ten have no way of paying their mortgage off, Saga estimates that they have to find 5 million pounds from somewhere to keep the lenders from knocking at their door.
Moving home could be the worst case scenario for those facing a shortfall, as many over 50s couldn’t bear selling their home because it’s filled with family memories. This could be why half of over 50s haven’t moved home for more than 20 years***. However, a quarter of people say that they will have to sell their home to make up for the shortfall from their endowment policy.
One in 13 of those facing a shortfall have bought themselves some extra time by extending their mortgage, while a third plan to dip into their savings to pay off their mortgage. While some people have some sort of plan in place, one in ten don’t know what they will do to pay the outstanding balance on their home.
Paul Green, Saga director of communications, commented: “Finding your endowment policy has failed to payout the way you expected can be a great shock, but facing an endowment shortfall need not mean that you lose your home as there are other options open to people to plug the gap.
The Saga Equity Release Advice Service has helped many people in this situation. By offering no obligation advice, the specialist advisers assess people’s financial situation and discuss their options with them. The advisers even check if someone is entitled to any state benefits that they’re not claiming, which has enabled more than a quarter of Saga customers to find, on average, an extra £688 a year.”
Notes to Editors
- *There are 81% of over 50s who have an interest only mortgage and are facing a shortfall.
- **Populus interviewed 8,577 Saga customers, all aged 50 and over, online between 22nd March and 1st April 2013. Populus is a member of the British Polling Council and abides by its rules.
- *** Populus interviewed 8,402 Saga customers, all aged 50 and over, online between 14th and 20th December 2012. Populus is a member of the British Polling Council and abides by its rules.
Saga Equity Release Advice Service
The Saga Equity Release Advice Service is provided by Just Retirement Solutions Limited and the Saga Equity Release Plan is provided by Just Retirement Limited.
- Equity release could offer homeowners aged 55 or over a way to release tax-free cash from their home to spend on whatever they choose.
- Expert advice with no advice fee, which could save you hundreds of pounds
- A no-obligation assessment of equity release based on your individual circumstances
- A free check to see if you’re missing out on any State benefits
- Access to a range of equity release plans at specially negotiated rates
- Exclusive access to the Saga Equity Release Plan, provided by Just Retirement Limited
- For more information please visit www.saga.co.uk/equityrelease
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