Older parents facing debt in later life

It's relatively common for people to now have children later in life, whether this is due to starting a second family, or simply choosing not to settle down as early.

However, research conducted by Saga Personal Finance shows that this is impacting the amount of debt that people are still facing when they get older.

Of the 9,000 over-50s that contributed to the study, 12 per cent still have a mortgage. This number rises to 20 per cent for 'second lifers' – people over 50 who have children with a new partner following a previous marriage or long term relationship.

In addition to this, second lifers are still facing more than £80,000 of mortgage repayments, while those without a new family have an average of £60,000 left to pay.

On top of mortgages, second lifers tend to have more non-mortgage debts, such as loans. 18 per cent of those with a second family have an average of £12,000 of outstanding debts, compared to 12 per cent of traditional families who have £10,000 worth of debts to repay.

It seems that a common solution for clearing this type of debt is to use property, 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.

As well as those with a second family, the research shows that people are often having children later in life due to concentrating on their careers. On average, one in five people in their 50s had their last child between the ages of 32 and 34 and a further 20 per cent had a child between 35 and 40 years old.

One in 17 people are over the age of 40 when they have their second child, meaning that many parents are in their 60s by the time their children reach university age.

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."