Doubling of mortgage debt for over-65s is a 'ticking time bomb'
Mortgage debt owed by over-65s is expected to double to £40bn by 2030, according to a report by the International Longevity Centre, as soaring house prices and slow wage growth, along with crippling student loans will force people to borrow into retirement. It predicted it will become increasingly common for people to be in their late 30s or 40s before they can afford the deposit to buy their first home. Labour MP Wes Streeting described the problem as a "ticking time bomb", just as borrowing on credit cards and personal loans rises at the fastest pace in more than a decade.
Mortgage debt owed by older households is set to double to £40billion by 2030, a report warns today.

Soaring house prices, slow wage growth and crippling student loans will force more people to borrow into retirement, according to the study.

Last night one politician described the problem as a 'ticking time bomb', with the amount owed on credit cards and personal loans also soaring at the fastest pace in more than a decade.

Mortgage debt owed by older households is set to double to £40billion by 2030, a report warns today (Stock image)

People are already having to wait longer to get on the housing ladder.

But the report predicts it will become increasingly common for families to buy their first home in their late thirties or forties as they struggle to cobble together enough for a deposit.

This is pushing the dream of retiring debt free beyond the reach for a growing number of households.

The study warns 1.42millon people aged 35 to 64 – more than six per cent of homeowners in this age bracket – will not have paid off their mortgage given the current term of their loan.

Most at risk are the middle aged, with 400,000 55-59 year olds – 11.4 per cent – set to borrow into retirement.

This falls to 5.4 per cent of 35 to 49 year olds –or 240,000 people - according to the study by the International Longevity Centre and supported by the Building Societies Association.

Today the over 65's owe a total of £19billion on their mortgages, but the study claims this will spiral to £39.9 billion by 2030.

Longer term loans lasting up to 35 years instead of the standard 25 years have become increasingly popular as stretched households try to spread the costs of their debt.

The report says 'current economic trends such as house price inflation, tighter credit conditions and low real growth means we can expect to see a significant shift in the customer base over the next thirteen years'.

It says the mortgage market is witnessing a 'marked evolution from the traditional route' of individuals buying their first home in their twenties, trading up in their thirties and forties, paying off debt in their fifties and sixties and then entering older age with little or no mortgage debt.

Wes Streeting, the Labour candidate for Ilford North said: 'This is a ticking time bomb. It's a serious issue'

People who are already retired and still have mortgage debt are generally able to afford their repayments, according to the study.

But it warns those who are forced to borrow into retirement in future 'may not all be as financially comfortable'.

Among those most at risk are degree educated, divorced men.

Wes Streeting, the Labour candidate for Ilford North said: 'This is a ticking time bomb. It's a serious issue. The Government needs to take much more radical action to address the housing crisis, by building more homes than planned and providing more help for first time buyers'.

Mr Streeting said he is worried about women born in the 1950s who have seen their state pension age go up by several years with little warning.

He added: 'They have yet to retire, they are struggling to pay off mortgage and now looking at paying off into retirement.'

Paul Broadhead, head of mortgage policy at the Building Societies Association described the changes as 'unstoppable' and said ministers, lenders and consumers need to adapt.

But Baroness Altmann, former pensions minister, said too many lenders are adopting a 'computer says no' approach and refusing to lend to older borrowers precisely because they are worried they will be unable to repay it in retirement.

She said: 'More people are likely to need to take out mortgages that last into their old age. If they have a secure pension income, there should not be too much of a problem.

'Unfortunately, though, many of the banks are still refusing to lend to people if their mortgage would last into retirement. However, some building societies have changed their policy and are recognising that people can repay their mortgages even if they are no longer working.'

A separate report published yesterday warned older workers are facing 'significant' challenges to their living standards and are struggling to save for retirement.

The estimated 1.8 million over 50-year-olds in low and middle income households have suffered a 'sharp income squeeze' in the wake of the financial crisis, according to The Centre for Ageing Better and the Resolution Foundation.