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Mortgage free savings window shrinks

Mortgage free savings window shrinks

Category: Savings

Updated: 07/02/2011
First Published: 07/02/2011

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The length of time that Briton's are mortgage free before entering retirement is shrinking, new research has revealed.

As a result of the smaller window of opportunity to save for life after work, Santander Savings says people are being forced into retiring later.

According to the research, workers who took out their first mortgage in the early 1960s had an average savings window of 21 years in which to concentrate solely on preparing for their retirement.

However, for those who have taken out their first mortgage sometime in the last decade, just 10 mortgage-free years will be available in which to save.

With the gap between becoming mortgage-free and retirement closing in, it is feared those who took out a mortgage in recent years - and those who have yet to do so - may struggle to bank enough cash for a comfortable retirement.

The concerns are heightened by the revelation that those over the age of 55 only save an average of £88 each month, increasing further the pressure to continue working later in life.

"For many people the period when they are still in employment but mortgage-free represents a golden opportunity to get some cash in the bank in preparation for retirement," said Reza Attar-Zadeh, director of savings and investments at Santander.

"This window has more than halved since the 1960s and the opportunity to save is getting smaller and smaller.

"Our advice to people is to start saving as early as possible, even if they put away small amounts every week or month."

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