Dealing with in debt in later life

Dealing with in debt in later lifeStarting a new family after getting divorced or separating from a long-term partner has become more common in recent years.

As a result, parents are increasingly finding themselves dealing with debt in later life.

New research by Saga Personal Finance found that 12% of over 50s still have a mortgage.

This figure rises to 20% for so-called ‘second-lifers’.

These are people over 50 who have children with a new partner, following a previous long-term relationship or marriage.

Second lifers were also found to have bigger mortgages on average than others of a similar age.

They were found to have more than £80,000 left to pay on their mortgage, compared to around £60,000 for people in their 50s without a second family.

In addition to bigger mortgages, second lifers were more likely to have other debts to repay, such as personal loans.

18% of people in their 50s with a second family had an average of £12,000 of non-mortgage debts on average, compared to 12% for traditional families, with average debts of £10,000 to repay.

The survey, which was carried out by Populus on behalf of Saga Personal Finance, and questioned around 9,000 over 50s, found it has become more common to have children in later life.

This could be because people are more career-focused when younger, as a result having children later 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.

The implications of having children later in life means the costs associated with childcare arrive later too.

According to Jeff Bromage, Chief Operating Officer at Saga Personal Finance:

“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.”

There is nothing inherently wrong with having debt left to clear in later life, whether that is mortgage debt or unsecured debt like personal loans.

But debt can act as a drag on your ability to achieve other financial goals.

Money spent on servicing debt (paying interest charges) and repaying debt might otherwise be allocated towards the cost of living in retirement.

As a result, holding debt in later life can mean a delayed retirement or having to accept a lower income in later life.

Financial Planning is particularly important for second-lifers, who find themselves tackling the costs of childcare and university education in their 50s and 60s.


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About Martin Bamford

Martin Bamford is a Chartered Financial Planner, Certified Financial Planner (CFP) professional and published personal finance author. He works with elderly clients to provide advice on funding residential care fees, hosts the Informed Choice Podcast and is a keen ultra runner.
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