A large number of over-50s will opt to cut their pension contributions in order to cover debt repayments if interest rates rise this week, research from LV= suggests.
The study claims 40% of over-50s who still work say increased interest rates would lead them to reduce pension contributions to keep up with mortgage, credit card and loan repayments.
LV= estimates some 44% of over-50s and 34% of people aged 60-69 who work still have outstanding mortgage debt.
The Bank of England's Monetary Policy Committee (MPC) is set to meet tomorrow to discuss interest rates, which have been at a historic low of 0.5% for more than a year-and-a-half.
Interest rate rises will also have a double-whammy effect on the over-50s, LV= says, as some 1.2 million working people aged over 50 plan to use equity release to fund their retirement.
Over half of those believe their house has fallen in value by an average of £21,706 since 2007.
"A rise in interest rates would force many people nearing retirement to reduce their savings," Vanessa Owen, head of equity release at LV= says.
"With the extra strain a rise in interest could bring, our research shows many people believe their property is the best chance they have to fund a comfortable retirement, despite the recent fall in property values."
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