HAVING children in later in life is impacting the amount of debt people have as they get older – especially if they have started a family with someone new after splitting up with a long-term partner.
“Second-lifers” – people over 50 who have children with a new partner following a previous marriage or long-term relationship, are more likely to have debt in the form of loans and housing debt as they struggle to pay for the cost of bringing up offspring.
A poll of almost 9,000 over-50s shows that 12 per cent still have a mortgage. However this figure rises to 20 per cent for so-called “second lifers”, according to a report by Saga Personal Finance.
On average, one in five people in their 50s had their last child between the ages of 32 and 34, while a further 20 per cent had a child between 35 and 40 years old.
However, one in 17 said they were 41 years or older when their youngest child was born, leaving many people in their 60s paying for teenage children’s driving lessons and university fees.
A recent report by the Child Poverty Action Group found that the cost of raising a child from birth to 18 has reached a new high of almost £150,000, for food, clothing, childcare and “social and cultural participation”. This is a cost which can hit older parents hard as they combine paying for their child’s upbringing with planning for retirement.
As well as having a bigger mortgage to pay off, second-lifers are also more likely to have non-mortgage debts, such as loans. Around 18 per cent of those with a second family have almost £12,000 of outstanding debts on average, compared to 12 per cent of traditional families who have to find around £10,000 before they are back in the black.
In addition, “second lifers” have a bigger mortgage than people their own age without a new family. On average, these people estimate that they have more than £80,000 left to pay on their mortgage, whereas those without a new family have to find around £60,000 before they own their home outright.
Jeff Bromage, chief operating officer at Saga Personal Finance, said: “Having children in later life keeps people on their toes and feeling young at heart.
“However, the cost of raising a child is continually increasing and these days people need to keep a close eye on their finances and make sure that they are getting the best deals.”