Retirement age has arrived, can you comfortably leave the workplace? For many people in the UK, the answer is not that simple. According to the latest survey by the British retirement savings platform PensionBee, more than half of the respondents are willing to delay retirement in order to pay off their mortgages. Only 9% of them said they would choose to retire early even if it meant renting a property after retirement.
The survey interviewed 2,000 UK adults. The results showed that whether or not they can “pay off their mortgage before retirement” has become a key factor for British people to decide when to retire. 45% of the respondents believe that clearing their residential mortgage before retirement is the top priority for ensuring a comfortable retirement life. Another 36% of respondents think that having a substantial retirement fund is crucial.
When asked to make a choice, 51% of the respondents said they are willing to delay retirement in order to pay off their mortgages. Only 9% of them would choose to retire early if they had to rent a property post-retirement.
The Pensions Policy Institute (PPI) of the UK pointed out that the design of the UK retirement pension system is based on the assumption that most people will fully own their homes when they retire, and thus, will not have to bear housing expenses after retirement. However, this is not the case in reality.
Currently, the average house price in the UK is around £270,000 (approximately $365,000), with London skyrocketing to £553,000 (about $747,000). For many first-time homebuyers, paying off their mortgages before retirement has become increasingly difficult to achieve.
Another notable trend is that the average mortgage term for first-time homebuyers in the UK has extended from 25 years in 2005 to 31 years in 2025. With the average age of first-time home buyers being around 32 years old, based on a 31-year mortgage term, typical homeowners will only pay off their mortgages around the age of 63.
According to a survey by the Financial Conduct Authority (FCA) of the UK, 24% of mortgage holders aged 65 and above still carry debts equivalent to four times their household income.
The institute estimates that by 2044, nearly 2 million households in the UK will be renting in retirement. For retirees who continue to rent a two-bedroom property, the total housing expense is projected to be around £200,000 to £400,000 (approximately $265,000 to $530,000). However, the median wealth in private pensions for 60 to 64-year-olds is only about £154,000 (around $204,000).
An Ipsos survey revealed that the UK ranks first globally in the degree to which “owning a home is seen as a symbol of success in life.” 69% of UK respondents believe that owning their own home is crucial. Additionally, 58% of them said that not owning a home throughout their lifetime would make them feel sad.
Adam Cooper, manager of PensionBee, stated, “For a long time, Britons have considered owning their own home as a key pathway to achieving financial security. However, with rising house prices and extended mortgage terms, even if one manages to save enough for a down payment to purchase a property, the time required from entering the property market for the first time to fully paying off the mortgage is getting longer.”
The survey also found that if the government allowed people to withdraw their retirement funds to purchase their first home, 51% of respondents aged 25 to 34 said they would consider it. Only 19% of respondents were very confident that their retirement savings would be sufficient to cover their housing expenses after retirement.
Furthermore, 37% of respondents were unsure whether their retirement funds would be able to support their housing expenses after retirement or had never thought about this issue before.