A recent study by Just Group focusing on Generation X has revealed that over a quarter (27%) of those born between 1965 and 1980 are not confident about paying off their mortgage by age 67.
This age corresponds with when most of this group become eligible for the State Pension. Within this demographic, 13% are certain they won’t clear their mortgage by then, and an additional 14% are unsure.
The research also underscores a stark contrast between London residents and those living elsewhere in the UK. In London, where house prices are significantly higher, 26% of Gen X mortgage holders do not expect to repay their mortgage before 67, compared to the national average of 13%.
A key factor contributing to these concerns is the increasing cost of borrowing. Nearly half (45%) of Gen Xers with a mortgage reported it was taking longer to pay off than anticipated. The most common reason, cited by 34%, was the need to extend the mortgage term to manage monthly payments. Additionally, 32% mentioned extending the term for home improvements, while 23% did so due to increased interest payments.
Stephen Lowe, group communications director at Just Group, said: “About three-quarters of the Gen X cohort own their own homes but many are struggling to clear their mortgage within the expected time frame. This group finds their finances stretched and are faced with the unenviable choice of either clearing the mortgage or saving for a pension.”
He further highlighted the impact of these financial challenges on the group’s retirement plans, especially in London: “People’s budgets are being squeezed as they juggle competing pressures. We are seeing growing anxiety among this demographic that many will approach retirement still carrying the burden of making their mortgage repayments. This is felt more acutely among those in London, where property prices are higher and nearly double the national average of Gen X homeowners with a mortgage worry that they will still be saddled with a mortgage as they enter retirement.”
