Debt Advice Help and Support

Thousands of people retiring with debt

Written by lister on 25 January, 2012

It's not just young people who are struggling to keep a handle on their debts as new research from Prudential shows that one in five people reaching retirement age are in debt.

Some 18 per cent of those looking to retire this year will do with outstanding financial commitments, with the average debt level standing at £38,200.

Prudential have tracked retiree debt for the past five years and stated that this year's number of retiring debtors has fallen year-on-year from 20 per cent in 2011, but the level of their financial burden has grown by an average of more than £5,000 from last year's figure of £33,100 per person.

Mortgages and credit cards make up the majority of the debt held with 50 per cent still owing money on their homes and 51 per cent struggling to maintain outstanding credit card commitment.

This means that on average those planning to retire this year will be making monthly payments of £260, equating to almost a fifth (19 per cent) of their expect monthly income of £1,290.
More worryingly, eight per cent of those retiring this year said that they do not think they will ever have the means to pay off their debts.

Men are most likely to have substantial debts. According to the research males retirees owe an average of £45,300 compared to £29,400 for women.

Vince Smith-Hughes, Prudential's retirement income expert, said:  "Retiring with outstanding debts could be a sign of a lack of financial planning. It is important therefore for those still at work to save as much as possible as early as possible, and to consult a financial adviser to help them plan for a comfortable retirement." 

Price comparison site uSwitch recently said that running up debts using a credit card could lead to financial commitments which last a lifetime.

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