Many Will Retire With Debts This Year

Many people who are retiring this year will have outstanding debts when they stop work, new research has found.

More than twenty percent of those retiring will still have debts when they stop work. Most will owe an average of £33,100 on mortgages, loans and credit cards, according to research from Prudential.

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.

Male retirees are more prone to having debts than women and men will also owe more than women when they stop working.

Careful personal finance planning and seeking professional advice is important to ensure that debts are minimised when retiring advises Vince Smith-Hughes of Prudential, who said:

“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.”

Rising energy prices and the increase in VAT are likely to squeeze the incomes of pensioners this year, so carrying a large debt burden will be difficult for those who are suffering rises in the cost of living at a time when their incomes fall.

These factors highlight the importance of good retirement planning and ensuring that measures are taken to save money wherever possible without reducing the quality of life.