20% of Those Retiring in 2011 Still Carrying Debt

A recent survey carried out by insurer Prudential has revealed that 20% of people retiring this year will still have debts when they finish working – owing an average of around £33,000 each.

As The Telegraph reports, the survey also revealed that one in 20 will finish work with unpaid debts of more than £50,000. This figure rises to one in 10 among men aged over 65.

Women are less likely than men to take their debts into retirement with them – with around 18% of women saying they would still owe money on retirement, compared with 23% of men. Women are also taking less debt into retirement with them – an average of £25,100, compared with £39,500 for men.

The highest percentage of people taking debts into retirement with them was recorded in Wales, where 37% of people finishing work this year would still owe money. This was sharply contrasted by the figure recorded in the east Midlands, where just 11% of people who expected to retire this year thought they’d do so with debts to their name.

The largest average debts in retirement were recorded in the South West, where those finishing work this year carried a debt of £69,100 each. New pensioners in the North East are carrying a lot less, though, with a debt of £12,700 each.

The research also revealed that over half (55%) of those retiring with debts this year had racked up debts on credit cards, while 52% hadn’t yet managed to repay their mortgage. Just under one in five (19%) owed money through bank loans, 14% had overdrafts and just 1% had unpaid debts to loan sharks.

On top of those who expected to carry their debts into retirement with them, 14% didn’t actually know whether they would have repaid their debts by the time they finished working.

Spokesperson at Prudential, Vince Smith-Hughes, 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 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.”

A spokesperson at http://www.debtadvisorycentre.co.uk, commenting on the findings, said: “Anyone carrying debt into retirement will have to make sure they’ve got enough available money to cover their monthly payments until their debts have been repaid.

“That can be particularly difficult in retirement, so those who haven’t retired yet should focus on repaying as much debt as possible before they finish work – so they’re not left with the risk of unmanageable debt in the years after work.

“We would strongly advise anyone struggling to repay their debts now to address the issue so it isn’t a problem later. Speaking to a professional debt adviser could be a good place to start.”