Report: retired and still in debt

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17 Feb, 2017

Report: retired and still in debt

A quarter of people planning to retire this year will still owe an average of £24,300, according to the latest research.

Credit card borrowing and mortgage fees were still pending for those preparing to stop working, says a report from Prudential. The poll, which questioned 1,000 people planning to retire in 2017, found 25% would be in debt, up from 20% in the same poll last year - and the highest level since the survey began in 2011.

The average amount they were expected to owe was £18,800 a year ago, lower than the dire sum recorded in 2012 amounting to £38,200. Retirement income expert at Prudential, Vince Smith-Hughes said: "For most people the move from work into retirement will see them having to cope with a drop in their income.

"So having to use precious retirement income to pay off debts could make life even more tricky for the newly retired.

"With this in mind, it is a worry that we've seen a big jump, not only in the proportion of retirees with outstanding debt but also the amount that they owe."

The poll found that of those expecting to retire with debts in 2017, it would take an average of nearly three and a half years to pay them off, with repayments costing an average of £230 a month.

However, 16% expected to take seven years or more and 7% feared they would never be able to repay the money they owed.

The report said 38% of retirees with pending debt still owed money on property, an increase on last year, while 51% were carrying credit card debt.

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