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One in 5 people retiring this year ‘still have debts to clear’

Nearly one in five British people retiring in 2018 will be doing so in debt, according to a new report.

The study by Prudential found that 19% of those planning to retire in 2018 say they will be carrying some form of debt with them, with Brits owing £33,900 on average.

As reported by The Mirror, credit cards and mortgages are the most likely sources of borrowing which soon-to-be retirees still have left to pay off.

On average, those retiring with debts expect to clear them in three-and-a-half years. However, one in seven (14%) expect to take seven years or more to pay off their debts and one in 16 (6%) believe they will never clear the money they owe.

Vince Smith-Hughes, a retirement income expert at Prudential, said: “It is worrying to see the rapid increase of a pensioner’s average debt. Interestingly, there is a smaller number of people retiring in debt, but for those pensioners retiring in debt, the amount owed is on the rise.

“It’s possible that some people feel more comfortable about servicing debt, and are borrowing more. Meanwhile more and more grandparents are helping their grandkids with university fees and children with house deposits.”

The research also suggests that those in the North West of England are most likely to retire in debt, whereas those in Wales are the least likely.

One positive is that the numbers are at least down on last year; one in four (25%) people preparing to retire in 2017 expected to have debts, although the average amount owed is higher than last year’s numbers (£24,300).

If you are struggling with debt, Money Advisor may be able to help. Find out how we can help you reduce your repayments and advise on a range of financial repayment options. Contact us today for expert, confidential advice with no obligation.

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