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Recent research has shown a massive fall-off in the number of 20-somethings taking out mortgage protection. Photo: iStock

By Lisa O’Donnell

Recent research carried out by life assurance and mortgage protection providers, Caledonian Life, has shown a massive fall-off in the number of 20-somethings taking out mortgage protection.

The company has revealed that only four per cent of all mortgage protection policies sold to them in 2013 were taken out by people in their 20s. This is in stark contrast to nine years ago, when this figure stood at 18 per cent, showing a decrease of 75 per cent.

While in 2004 the majority of policies were taken out by people in their 20s and 30s, this trend has changed considerably with those over 40 now accounting for 55 per cent of all policies.

“The decrease in younger people taking out these policies is quite simply and indeed obviously, down to them not taking out mortgages,” said Tony Burke of Caledonian Life in Cork. “This is for all the reasons we know about and hear about in the media and in our daily conversations. For example, difficulty in accessing credit, banks looking for higher loan to values (LTV’s), lack of houses available versus demand in urban areas, amongst others.”

He added that the high number of young men who have been hit by unemployment and emigration is also having a major impact on the mortgage market.

Mortgage protection sales to people aged 40-49 have increased by 7 per cent since 2004.

Caledonian Life believe that the jump of sales in this category is due to the fact that more people of this age than in the past are only now getting on the property ladder for the first time. The 50-59 year category also saw a significant increase from 9 per cent to 17 per cent.

“One could speculate that this is due to them snapping up some of the property available at reduced prices from the peak years of 2004-2007,” Tony said, “Or indeed those who took early retirement packages, are using some of their lump sum to buy an investment property, as high rents are providing good income streams and so on.”

Fortunately, for those seeking mortgage protection at any age, prices for this cover are now at a historic low.

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