This is according to new research from Prudential which showed that one in 20 will retire with outstanding debts of more than £50,000, rising to a staggering 1 in 10 among men over the age of 65.
The Class of 2011 study surveyed people intending to retire during the forthcoming year. The results show that 21% will have to continue to pay down debts while reorganising their finances after finishing work. Another 14% don’t know whether or not they will be debt-free when they retire.
The major sources of debt in retirement are credit cards and mortgages – 55% of those retiring with debts in 2011 owe money on credit cards while 52% still have outstanding amounts on their mortgage.
Men are more likely than women to carry debt into retirement – around 23% of men say they will still owe money compared with 18% of women. And the average debt owed by men is substantially higher at £39,500 compared with £25,100 for women.
Commenting, Vince Smith-Hughes of Prudential said: “These figures show how the Class of 2011, a previously risk-averse generation of savers took advantage of the consumer credit boom of the last decade. Total consumer debt in the UK has more than doubled since 2000 and a large number of people planning to retire this year are now faced with spending a significant part of their retirement income meeting these debt repayments.
“While we’d all like to be debt-free at retirement, clearly this isn’t possible for everyone. It is important not to panic when faced with a reduced income and the need to pay off debts. There is plenty of help available when planning your retirement finances and a financial adviser is a good first port of call.”
