A study from insurance company Royal London Ireland has found that one in five people in Ireland expect to have to continue paying off their mortgage into retirement.
The study looked at the expectations of those seeking to own a home by the time they reach the State retirement age of 66.
The Irish subsidiary of the pensions and life insurance group found that almost a third of people in Ireland surveyed did not expect to own a home outright by the age of retirement. More than a fifth (25 per cent) said they expected they would still be paying off their mortgage into retirement.
Women were more likely than men (23 per cent compared to 18 per cent) to not expect to be mortgage-free by the time they retired from work. However, two-thirds (65 per cent) of adults said they believe they will own their own home in retirement. Meanwhile, around 14 per cent said they didn’t expect to own a home or be paying a mortgage when they retire.
Those aged in the over 55 bracket were the most confident about their prospect of owning a home by the time they retire – 80 per cent felt this way. This percentage fell to 52 per cent of people aged 18-24 and 57 per cent of those aged 25 to 44.
Darragh Feely, sales director at RLI, noted that the rising age of first-time buyers in the state has climbed to 34.
“The age at which first-time buyers get on the property ladder continues to creep ever higher,” Mr Feely said.
“The number of first-time buyer borrowers aged over 35 increased to 44 per cent last year – from 36 per cent in 2019 and only 17 per cent in 2004.”
He added that he hoped the measures announced in Budget 2025 – including as the extension of the Help-to-Buy scheme and mortgage interest relief – will hopefully help first-time buyers to get on to the property ladder earlier and manage their mortgages.
“However, if the trend of buying homes later in life continues, this is likely to put more pressure on some mortgage holders, as they have less time to pay off their home loans,” he said.
Research from the Economic and Social Research Institute (ESRI) has recorded a fall in home ownership among those in prime-working age in recent years. Just a third of adults under 30 are now homeowners in Ireland, with research from 22 showing that the share of 25-34 year olds living independently who own their own home more than halved between 2004 and 2019, falling from 60 per cent to just 27 per cent.
The ESRI also found that future cohorts of retirees are likely to have substantially lower rates of homeownership than current retirees. Research – funded by the Pensions Council – estimates that 65 per cent of those currently aged 35-44 are likely to become homeowners by retirement given current trends, compared to 90 per cent of those currently aged 65+.
Compared with current retirees (aged 65+) where the homeownership rate is around 90 per cent, homeownership rates have fallen 10 percentage points lower (approximately 80 per cent) for those currently aged 55-64 and 45-54, with this differential “unlikely to close substantially for these groups given their position in the lifecycle,” the ESRI said.
Statistica research published in September showed that Ireland is lagging behind other European nations when it comes to rates of home ownership. While the rate is highest in Albania, at 96 per cent, followed by Romania at 95 per cent and Slovakia at 93 per cent, Ireland places in 24th position, with a home ownership rate of 69 per cent. Bottom of the list is Switzerland, where the homeownership rate is 42 per cent.
It comes amid warnings that without intervention, there will be significantly higher rates of income poverty in retirement for younger cohorts.