20% of UK pensioners still owe thousands on their mortgage and around 33% have credit card debts, according to a report earlier this week.
Aviva’s Real Retirement Report also shows that outstanding mortgage debt amongst the over 55s has increased to over £65,000 from 2010’s February figure of £54,500.
The survey showed that too many pensioners rely on borrowing as well as the state pension. People in the over 75 age group owe an average of £3,370 on credit cards and only 42% of people retiring have their own private pension to help fund their retirement.
In other mortgage news, the cost of a five year fix has risen to 5.66% this week. New figures show that a five year fixed rate mortgage is now at its most expensive since June 2010. This equates to an additional repayment of £41.25 a month for homeowners, many of whom are already struggling to balance their finances.
Over recent weeks, mortgage lending companies have been anticipating an interest rate rise and this has led to a shift in the pricing of fixed rate contractor mortgages.
Borrowers who are keen to find a low fixed rate deal to protect themselves against rising interest rates have now missed the boat. The average 3 year fix now stands at 5.1% and for a 2 year fix, the average rate is 4.58%.
The Bank of England MPC is due to meet today to set the base rate for the coming month and many mortgage holders and lenders alike will be anxiously awaiting its announcement.
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