Labour have hinted that they could make changes to the state pension age.
Tens of thousands of future pensioners could still be paying off their mortgages post-retirement amid a steep rise in “ultra-long” terms, it’s reported. The reporting comes after government ordered an early review of the state pension age amid warnings that people retiring in 2050 could get £800 less per year than pensioners of today, and fears over a lack of savings among older people.
Data from the Financial Conduct Authority, obtained by financial services firm Quilter, suggests there’s been a 251% spike in mortgages taken out by over-36s with terms of 35 years or more since 2019. According to the stats, 8,639 36s took one out in 2019, compared to 30,338 last year, an increase of 21,699.
The data, obtained via a freedom of information request and shared exclusively with The i Paper, revealed that over only the past two years, nearly 52,000 people in that age bracket took out ultra-long mortgages.
These people could still be making mortgage payments in their seventies.
Meanwhile, the number of people between the ages of 31 and 35 taking out long-term mortgages jumped more than 50% since 2019, with 98,370 in 2024. These individuals could still be paying them off by the time they reach the pension age, which is currently 66, as reported by the i.
With the cost of renting or buying remaining prohibitively high for many, people often opt for ultra-long mortgage deals to spread out payments over a longer period and soften the blow of higher interest rates.
But experts have voiced concern about the impact on savers and the future property market.
Pete Mugleston, managing director and mortgage expert at onlinemortgageadvisor.co.uk, previously told Express.co.uk: “The increasing number of under-30s opting for ultra-long mortgages raises concerns about a potential housing bubble and individuals being trapped in unaffordable mortgages.
Though they can bring short-term benefits to first-time buyers in the short term, Mr Mugleston said: “They also come with long-term risks.
“Young homebuyers may find themselves locked into mortgages for decades, potentially stretching well into their retirement years.
Stock image (Image: Getty)
“This raises concerns about their ability to adapt to changing financial circumstances, such as job loss, income reduction or unexpected expenses.
The govenment’s move to move forward the pension age review came as new data from the Department for Work and Pensions (DWP) showed that 45% of working-age adults were putting nothing into their pensions, while a staggering 15 million are estimated to be “undersaving”. The self-employed, low-paid and some ethnic minorities are reported to be particularly affected.
In her speech announcing the review, Ms Kendall said: “Women who are now approaching retirement have half the private pension wealth of men, so the average woman in her late 50s can expect a private pension income of just over £100 a week, compared to £200 a week for men.
“Only one in five of the self-employed are saving into a private pension, down from half in the late 1990s, meaning over three million self-employed people aren’t saving anything at all for their retirement.”
Ms Kendall also said young people, in particular, were struggling to save for retirement because of soaring housing costs. She said young people “haven’t got a hope in hell of getting on the housing ladder” and were being “killed by rent” – which she said was driving a “tsunami of pensioner poverty”.
The government also announced it would revive the Pension Commission to “tackle the barriers that stop too many saving in the first place”.
Led by Baroness Jeannie Drake, who was a member of the previous commission, it is expected to deliver recommendations on ways to increase retirement income in 2027, and the proposals are set to extend beyond the next election.
