11 April 2016, 01:00
11 April 2016, 01:00
Later life parents left in debt
• One million over 50s are ‘second lifers’ – those who have second family later in life
• One in eight over 50s still have a mortgage
• Second-lifers have an average mortgage debt of more than £80,000
• One in 17 over 50s had their last child when they were 41 years or older
Over recent years it has become more common to start a new family after getting divorced or separating from a long-term partner. However, having children in later in life is impacting the amount of debt people have as they get older, according to research by Saga Personal Finance.
A poll of almost 9,000 over 50s shows that 12% still have a mortgage. However this figure rises to 20% for ‘second-lifers’ - people over 50 who have children with a new partner following a previous marriage or long term relationship.
Furthermore ‘second lifers’ have a bigger mortgage than people their own age without a new family. On average, these people estimate that they have more than £80,000 left to pay on their mortgage, whereas those without a new family have to find around £60,000 before they own their home outright.
As well as having a bigger mortgage to pay off, second-lifers are also more likely to have non-mortgage debts, such as loans. Around 18% of those with a second family have almost £12,000 of outstanding debts on average, compared to 12% of traditional families who have to find around £10,000 before they’re back in the black.
Analysis of Saga Equity Release Advice Service data shows that some of these may be turning to the value in their property to help clear some of this debt, with around one in five people releasing equity from their home to pay off their mortgage, while one in three used the service to clear debt.
The Populus survey also shows that it has become more common to have children in later life, whether that is because people are concentrating on their career and having children later on or starting a family with a new partner. On average, one in five people in their 50s had their last child between the ages of 32 and 34 and a further 20% had a child between 35 and 40 years old.
However, 1 in 17 said they were 41 years or older when their youngest child was born, presumably leaving many people in their 60s paying for teenage children’s driving lessons and university fees. Those having children in later life would be wise to take out a life insurance policy so that their family is financially protected.
Jeff Bromage, Chief Operating Officer at Saga Personal Finance, commented: “Having children in later life keeps people on their toes and feeling young at heart. However, the cost of raising a child is continually increasing and these days people need to keep a close eye on their finances and make sure that they are getting the best deals, whether that’s when you’re borrowing money or investing it in the stock market.”
Notes to editors:
*Populus interviewed 8,854 people aged 50 and over online between 21st and 28th March 2016. Populus is a member of the British Polling Council and abides by its rules. For more information visit www.populus.co.uk.
About Saga Personal Finance
Saga has been serving the personal finance needs of the over 50s for more than 20 years. Please see below for more information about some of the products and services Saga offers the over 50s:
Saga Life Insurance
Help protect your loved ones with Saga Life Insurance. You choose the amount of cover and length of time you would like to be insured for. Other benefits include:
• Your premiums are guaranteed to stay the same throughout the policy (unless you alter your policy)
• Terminal Illness Cover and Accidental Death Benefit are automatically included at no extra cost
• You have the option to add Critical Illness Cover to your policy for an additional cost, which is designed to pay out a cash sum if you are diagnosed with one of the 41 specified conditions
• Protection provided by Legal & General, the UK's number one term assurance provider**.
**Swiss Re Term & Health Watch Report 2013, based on new individual term assurance sales in 2012
Saga Equity Release Advice Service
If you are a UK homeowner aged 55 or over, equity release could offer you a way to access money tied up in your home, by allowing you:
• To release a tax-free lump sum to help you make the most of your retirement
• The ability to release the cash when you need it
• The freedom to spend the cash on almost anything you choose.
The Saga Equity Release Advice Service, provided by Just Retirement Solutions Limited, can help you decide if equity release could be right for you.
Saga Platinum credit card
The Saga Platinum credit card is available for UK residents aged over 50 and all Saga cardholders can manage their accounts online. The Saga Platinum credit card offers:
• 11.9% APR (variable)
• 0% foreign currency fees on transactions made abroad
• 0% on purchases for the first 9 months
• 0% on balance transfers for the first 9 months (3% fee applies)
• For more information about the Saga Platinum credit card visit: http://www.saga.co.uk/money/saga-credit-card