'Second life' parents take on more debt strain


House Prices Hit New High In The UK

Divorce is increasingly expensive. A new Saga survey carried out by Populus claims that many Brits on their second marriage now are dragging increasingly large chunks of mortgage debt behind them. Populus found 'second lifers' had an average mortgage debt of £73,881, significantly more than those people whose relationships were still intact.

And many thought their debts would not be clear until they had hit 80. Is that bad?

Mortgage pressure?

Saga's survey claims 16% of over 50s say still have a mortgage. "This figure rises to 26% for people who are going through a second marriage or long-term relationship," says Saga.

Let's get some perspective. Given the surge in UK house prices over the last 15 years, this figure does not look as worrying as Saga makes out. Mortgage debt of this level isn't uncommon (many mortgages are vast) and interest rates remain rock-bottom historically.

Indeed, increasing numbers of Brits are renting through their forties and fifties because of high house prices, not to mention marriage break-up pressures. (Shelter says the average house cost five times the average salary, but by 2012 it had jumped to a massive ten times.)

The joys of kids

"This group are also more likely to have outstanding debt on loans," continues Saga, "and, presumably, will be faced with the added burden of things like university fees for their children and grandchildren."

This is more realistic, particularly with couples having children increasingly later in life, adding more financial pressure.

"While 12% of over 50s have outstanding loan debts," says Saga, "the figure rises to 16% for second lifers, who have on average amassed £13,652 to pay off, compared to £10,830 for the rest of the over 50s."

Need to worry?

Saga's survey is being pushed by its Equity Release arm, so obviously they're trying to make a case for their product. But they're right to flag up the combined impact of mortgage and personal debt pressure.

Almost 14,000 people - the highest number recorded by the Financial Ombudsman Service (FOS) - got in touch with it about mortgage worries in the last year. Meanwhile tighter rules on mortgage lending are thought to have dampened borrowing recently.

If Saga's numbers are correct, the fact that 16% of over 50s still have a mortgage suggests an awful lot of people have paid their mortgage off completely by 50, can steer well clear of the nightmare of the private rental market, and can afford to splash out a bit.

Even with a teenager (or three) in tow and a second relationship on the go. Did anyone say it would be easy?