Almost three in five (57%) say their financial situation has got worse in the last year.
Overall, almost half (46%) of people do not feel confident about their finances for the future, a figure that has risen from 35% in 2021.
According to the Equity Release Council, it’s older people around retirement age (65-74) that have seen the greatest loss of confidence.
Four in 10 are now worried about their future, a huge rise from 18% in 2021.
The trade body’s research, supported by Canada Life and Equity Release Supermarket, revealed that one in five (20%) mortgaged homeowners feel their current loan is “unaffordable” – equivalent to 1.7m households.
Dipping into life savings
Nearly a third (30%) of respondents have or plan to use pension savings to pay off their mortgage.
These mortgage pressures risk adding to people’s savings shortfalls in later life, according to the Equity Release Council, with many already concerned they won’t be able to afford a comfortable retirement.
More than one in three homeowners (37%) say they have struggled to build up enough pension savings to be confident about their living standards in retirement. And four in 10 are worried about using up their pension savings too quickly.
Jim Boyd, chief executive officer at the Equity Release Council, said: “The deterioration of confidence in our future finances since the Covid pandemic is shocking, particularly among those about to retire. More people are having to make hard choices which will potentially have a long-term impact on their financial security.
“Mortgage repayment pressures mean many households are planning to use their pensions to pay off mortgage debt, possibly at the expense of a comfortable retirement. While others are struggling to pay these higher mortgage costs during their working lives which is limiting the amount they can save into their pension. Although many hope to retire debt-free with a healthy pension pot, we mustn’t forget the millions who can’t save or pay down their mortgages and encourage them to consider all their options including property wealth.”
Tom Evans, MD of retirement at Canada Life, added: “It’s important that those yet to make plans for their retirement, start doing so sooner rather than later. As the current economic environment shows having contingency plans in place is vital.
Mark Gregory, founder & CEO at Equity Release Supermarket, noted: “More homeowners approaching the age of 55 are increasingly considering equity release, in part due to the higher costs of living and the need to release equity tied up within the household to facilitate this.”