29% of over-55s expect to be in debt in retirement or are unsure whether they will have paid off all their financial commitments, according to research from equity release lender More 2 Life.
Around 60% of those surveyed had applied for some form of credit within the last two years, including 58% of those aged 65 and above, but one in eight have been turned down with some reporting that their age was a factor in the decision; 18% of those aged 65 and over said they were refused credit on the basis of their age.
The lender claims its nationwide study underlines the growing need for increased flexibility from lenders as well as a recognition that increasing longevity and rising house prices mean more people owe money on their mortgages past traditional retirement ages.
More 2 Life believes there is growing demand – and a need – for lending solutions aimed at over-55s who may need to borrow past traditional retirement ages. Its research suggests there is strong demand for credit among the over-55s with more than 58% borrowing in some form in the past two years.
There is also demand to continue to borrow into retirement with nearly two-thirds of those questioned welcoming the ability to borrow in retirement without necessarily wanting to use it.
Stuart Wilson, marketing director at More 2 Life, said: “Given the high levels of those who expect to be in debt at retirement, it is crucial that pensioners and those in the run-up to retirement focus on having sufficient income to support them once they retire.
“However that can be more easily said than done and the industry needs to focus on enabling people to borrow responsibly as well as open up the opportunity for those approaching retirement to make the most of the equity in their property.
“Mortgage debt is a particular issue and the concern about interest-only mortgages needs to be addressed. In many cases those people are entirely able to service their debts but just need lenders to take a flexible approach.”