Mortgage – How does pension saving change when people full compensation of their mortgage? – Institute For Fiscal Research
We study the extent to which owner-occupiers of their 50s and 60s change their personal pension saving after they full compensation of the mortgage on their major residence. Utilizing panel information from a family survey, the English Longitudinal Examine of Ageing, we determine those that accomplished compensation of their mortgage as anticipated two years prior. Regardless of mortgage expenditures falling by over £200 per individual on common, there’s little ensuing change in common pension saving. It’s because solely a small minority of people react – the chance of a person growing their month-to-month pension saving by greater than £150 will increase by solely 5 proportion points on finishing compensation of a mortgage. This implies that if policymakers want to affect behaviour with a purpose to enhance personal pension saving, interventions focused at these finishing their mortgage compensation may very well be a tractable strategy. Such people would have the ability to enhance pension saving whereas sustaining spending at current ranges.