An increasing number of pensioners are struggling to make ends meet because they are still paying off their mortgage in retirement.

Those in, or nearing retirement, owe £98 billion on their mortgages, an average of £31,000 each, according to research from Key Retirement Solutions, an independent financial adviser that specialises in equity release.

Dean Mirfin at Key Retirement Solutions said: “We are seeing an increasing number of over-60s coming to us with mortgage debt that they are struggling to manage. There are various reasons why people don’t clear their mortgage before they retire. For some, continuing their mortgage post-retirement was the only way they could afford to buy their property. Others have consolidated other debts onto their mortgage and extended the term while some were forced to take a longer term because of an endowment shortfall.”

And the problem is set to get worse. Rising property prices mean that the average age of first time buyers is also on the up as young people are forced to wait longer while they save for a deposit. In turn, many will be older when they finally clear their mortgage. Some are also forced into taking out longer terms in order to get on to the property ladder, which again pushes up the age at which they will be mortgage free.

Divorce is also having an impact as people, who thought they were on track to repay their mortgage by a certain age find this is put back because they either have to extend their existing mortgage in order to buy their ex-spouse out of the house, or start again on the housing ladder.

David Hollingworth at L&C Mortgages, a broker, said: “Many lenders will consider lending beyond retirement age although they will ask how you will meet your repayments and will usually require evidence of what your likely pension will be. However, if at all possible people should aim to repay their mortgage before they stop working.”

Anyone who is struggling to make ends meet should seek financial advice, as there are options open to them. Mr Mirfin said: “A lot of people find they can relieve their problems just by remortgaging on to a lower rate. Downsizing is another option as is an equity release plan.”

Times Recommends

• How to sell your home in a downturn
• How to boost your spending power
• Unemployment benefits explained