More than 780,000 will be making mortgage or rent payments after they retire, survey says

More than 780,000 will be making mortgage or rent payments after they retire, survey says

New research from Aviva has found that while the majority of people (60%) believe they will have their homes paid off by retirement, 27% of those surveyed believe they will still have payments to make.

More than 780,000 people believe they will still be paying off their mortgage or paying rent when they retire, while almost half believe they will have to find some form of work to supplement their income.

New research from Aviva has found that while the majority of people (60%) believe they will have their homes paid off by retirement, 27% of those surveyed believe they will still have payments to make.

This is highest amongst 35-44-year-olds at 36.5%, however, 21.5% of those aged 55+ also expect to be paying their mortgage or rent.

The remaining 13% of those surveyed believe they will inherit property and live mortgage-free when they retire, with more men (17%) than women (10%) having this expectation.

Meanwhile, 44% of those surveyed believe they will have to take up another job, whether full or part-time, to supplement their income in retirement, 10% of whom will be seeking a full-time position.

While 31% say they won't need to work after they retire, 25% of those say they would seek employment because they enjoy working.

Of the 27% of people who will continue to make mortgage or rent payments past retirement:

  • 31% say they have no idea how they will pay, 
  • 17% say they haven't thought about it, whilst another 
  • 14% are worried about it 
  • 22% say would depend on the State for support 
  • 20% plan to cover outstanding payments from savings or investment income 
  • 16% say would pay their mortgage/rent from their retirement lump sum 

Commenting on the findings, Aviva's Stephen Rice said the research highlights some "very real societal issues" that need to be addressed to avoid people living in retirement poverty.

With rising house prices, high rents, and the need for a substantial deposit, those lucky enough to be able to get on the property ladder are doing so later and with extended mortgage terms that they are likely to be paying off into retirement," he said.

"It is also likely that the number of long-term renters will continue to grow as they simply can’t get on the property ladder and will continue to have to pay rent, up to and including in retirement."

The survey also asked respondents whether they thought their parents are or were better off financially in retirement than they expect to be:

  • 32% believe their parents are/were less well off than they will be 
  • 29% believe their parents are/were much better off 
  • 26% claimed that we all struggle a bit financially in retirement, with their parents making lots of sacrifices due to financial constraints, with the expectation that they will do the same 
  • 13% think that not much has changed, and we will all live relatively comfortably in retirement.

Mr Rice continued: "The expectation with previous generations was that they would work hard, save up and buy their own homes and, by the time they retired, their mortgage would be fully repaid.

"As such, they believed that their day-to-day expenses would plummet in retirement. However, the landscape has changed dramatically."

A report published by the Central Bank in July said that the over 60s represent a quarter of all cases living in long-term mortgage arrears.

"The reality is that this figure is likely to increase further as will the incidents of people struggling financially in retirement unless people begin to save for their retirement earlier and take advantage of the tax benefits that are available to pension savers," Mr Rice added. 

"With inflation in Ireland currently running at a 10-year high and with deposit interest rates primarily in negative territory, savers should consider investing their hard-earned savings into their pension.” 

The survey concluded by asking respondents the top three things they are looking forward to in retirement with foreign travel topping the poll at 64%, followed by spending time with family (61%) and seeing friends (45%).

Other popular choices included eating out (36%), hiking and walking (30%), gardening (26%), DIY activities in the home (20%), playing golf (11%) and other sporting pursuits coming in at 8%.

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