19% of people retire with debt
28/01/2015
One in five people retiring this year will have to do so with debts averaging £21,800, a study has shown.
Research from Prudential, a financial services company, found that 19% of retirees will still have debt to pay off when they retire this year. This is an increase on the 17% of retirees with debt last year. 43% of those who took part in the survey still have a outstanding mortgage.
On average, a woman who will retire this year will owe £24,900, while men will owe an average of £19,700. The majority of retirees predicted that it would take them just over three years to clear their debts, but 9% of them expect to take nine years or more, and a further 5% believe they will never pay them off.
Debt repayments are currently costing the average retiree more than £200 a month, and 14% of them are still paying over £500 a month.
Stan Russell, retirement expert at Prudential, said:
“Our new research shows a welcome downward trend in the average amount of debt for people retiring this year. However, it is a concern that the proportion of people reaching the retirement milestone still owing money is refusing to fall.
"For many, retirement is a time in life when it is necessary to re-assess household budgets, and any debts outstanding will inevitably make this job more difficult. A consultation with a financial adviser or retirement specialist can help people to get their finances ready for life after work."
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