Shift to later parenthood leads to later life debts

New research shows how the social shift towards having children in later life impacts on the age at which people will be debt free. The survey for Saga Life Insurance shows that 17% of over 50s still have a mortgage, this rises to 23% of those who had children in their 40s.  This group are also more likely to have outstanding debt on loans and still be paying university fees for their children or grandchildren.

The trend towards later life parenthood is continuing; on average the over 50s say they had their last child aged 31, however 20% say they were aged between 35 and 40 and one in twenty had their last child in their forties.  Recent ONS data suggests that three times as many women over 40 had a baby in 2011 compared with 1991. 

The Saga survey shows that people who had children in their 40s will be 3 years older than average by the time they pay off their mortgage (69.63 vs 66.78), they also have a higher amount of outstanding debt on their home - on average the over 50s owe £62,262 on their mortgage, this rises to £76,719 among those who had children in their 40s.

The trend towards having children later means that other financial commitments are extended into later life.  One in ten over 50s is paying for their children or grandchildren's university fees, this rises to almost a quarter (23%) of those who had children in their 40s.  This group are also more likely than most to still be paying off a loan (17% vs 13%) and the balance outstanding on their loan is on average £4,000 higher (£15,274 vs £11,288)

Saga has also been able to identify that one in twenty over 50s are ‘second lifers' in that they have had children with a new partner following a previous marriage or co-habiting relationship.  The research shows that this group on average had their last child aged 38, but almost a third had their last child over the age of 41.  They are much more likely than average to still be paying off a mortgage (26% vs 17%).  A fifth (21%) of second lifers are paying uni fees, a further fifth (19%) are still paying off a loan and their outstanding loan debt is almost double the average amount at £21,517.

Roger Ramsden, Chief Executive, Saga Services commented: "Twenty years ago, by the time people retired the majority would have paid off their mortgage, their children would no longer be in education and would have left home long ago.  Today people have mortgage and family responsibilities into later life - but the protection that they may have had through work or their own life cover often lapses- leaving a ‘protection gap'."