One in three retires with £17,000 of debts
ONE in three workers retiring this year will have more than £17,000 of debt hanging over him or her.
As many as 231,000 people will still owe £17,460 on credit cards, loans and mortgages after they have received their last pay cheque.
Paying back the money will typically take three-and-a-half years but it will take nine years or more for one in eight people.
However, more than a third expect to die in debt, according to an analysis of the Retirement Class of 2020 financial study.
Struggling
Of those aged 55 and over who are still in debt, 48 per cent owe money on credit cards, 31 per cent have an outstanding bank loan and 14 per cent still have a mortgage.
Eight per cent owe more than £20,000 while four per cent do not know how much debt they are in.
Dawn Stobart, of the charity Christians Against Poverty, said pensioners struggling with debt make up six per cent of their client base.
She said: “Like all other debt advice organisations we’re seeing an increase year-on-year of people struggling with public sector and utility debt. People are borrowing to live.”
Some people retire with debt due to last minute unplanned expenses but 34 per cent of workers only start to make definite plans 12 months before they are due to draw their pension – which is too short a time to clear borrowings, experts say. People retiring in Wales are the most likely to have debts – 48 per cent – but the average amount they owe is among the lowest in the UK at £11,180.
The biggest average debts are owed in the North-east at £22,900 and in the South-east at £22,400 with people retiring in Yorkshire and Humberside owing the least – at £9,000.
Those in the North-west also have lower than average debts, at £10,100.
Will Hale, of equity release specialists Key, said: “Even those with generous incomes may find paying back an average of £17,000-plus a stretch at a time when they should be enjoying an active retirement and worrying less.”