September 17, 2007
Pensions crisis for young homeowners
The desire to get a foot onto the property ladder could leave pensions falling short. The costs associated with buying property are said to be taking up such a chunk of the mortgage payers income that there is little over for them to even start to think about paying into a pension scheme.
There has been a drop of almost fifty per cent of younger people paying into a pension scheme, while their debts on the other hand have nearly doubled. However there is a growing trend in the belief that while buying may be expensive at first, the financial struggle will eventually pay off many years later, as the property prices will increase over time. It is this potential long term investment that young people feel is a replacement for a pension.
The average value of properties owned by 25 to 34 year olds, is £167,000, while the average mortgage for the same age group is £94,000! On top of this the average debt for these household is around £5,000.
They should be thinking eggs and basket!
Source [This is London]
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