Nearly one in five Retiring in Debt!
Around one in five of those retiring this year will have debt averaging over £31,000 according to recent figures issued by Prudential.
20% of all men enter retirement with debt compared to 16% of women which is consistent with 2011.
Around 56% owe money on credit cards, 21% have outstanding bank loans and 19% have overdrafts. Fewer of this year’s retirees with debts have outstanding mortgages – down to 43% from 50% last year.
Most retirees with debts expect it will take just under four years to clear the money they owe. One third of people expect of pay off their debts in 2 years, while 12% do not expect to ever be debt free.
A spokesman for the Prudential said “the fall in average debt owed by this year’s retirees is a welcome sign that people are paying off some of the money they owe before they stop working. Debt does not have to be a major issue for people in retirement as long as they have sufficient income, and realistic and manageable repayment programmes in place. There is plenty of free help and advice available through the Money Advice Service and Citizens Advice Bureau for those with debt issues”.
Expected retirement incomes are at a six year low and clearly a fine budgeting act is necessary to reduce debt when there are limited resources.
Tim Corfield comments “we are seeing more people contact us who have retired about debt issues. People are finding it essential to work longer which is probably one of the reasons for the reduction in the actual debt levels”.
Griffin and King