Posted on March 5th, 2011 | Categories - Mortgages
Rising inflation and living costs mean people may have to save until their mid-40s before they can obtain a mortgage.
Saving for a deposit on a house could take over ten years.
The average age of a first time buyer could increase to 44 because people are failing to save enough cash to pay for rising deposits, according to a new study.
Scottish Widows found that if people wait until they reach the age of 30 before they start saving for a deposit, it could take them 13 years to gather enough money to secure a mortgage on a typical home.
It also highlighted that about 18 million Britons are failing to put any money into savings because they can only just make ends meet due to the rising cost of inflation, student fees and the risk of unemployment. This marks a 16% rise from figures revealed a year ago.
The proportion of 18 to 24 year olds who do not save has risen from 18% to 33% equating to about 2.6 million people in total. The study found that this group is giving a higher priority to paying off debt and credit cards instead of saving.
Head of savings and investments at Scottish Widows Ian McGowan said: “It is unsurprising that the financial crisis has impacted upon people’s savings behaviours, but the concern is that this has created a generation of people who simply do not save and cannot get onto the property ladder. It is clear that people who want to get onto the property ladder are not making the commitment to saving at a young enough age”.
He added: “We know it is not practical for people today to put aside huge amounts of money, but even still it is critically important that saving does not become a lost art”.