Almost a third of retirees were in debt at the time they stopped work, research by Old Mutual Wealth shows.
The study found that 30% of pensioners owed an average £34,500 at the point of retirement. A fifth (19%) had debts of more than £50,000 while almost 1 in 10 owed over £100,000.
Of the people surveyed:
- 21% were still paying off their mortgage
- 14% owed money on credit or store cards
- 6% had unsecured loans.
The survey points toward a disconnect between pensioners’ expectations of retirement and the financial reality. Just 17% said they expect to carry debt when they retire; of these, 9% expect to owe money on their house and the average amount of anticipated debt is £33,500.
The investment group commissioned YouGov to carry out the survey in which they polled more than 1,600 adults.
Adrian Walker, retirement planning manager at Old Mutual Wealth, said that “debt planning is just as important as saving and investing” for retirement planners:
“We have become a nation comfortable with debt and this follows many people into retirement. I imagine most people would hope to be releasing themselves from the shackles of debt before they retire, particularly the debt attached to their home.
“This new data shows the harsh reality that many will not be able to release themselves from those ties immediately, as levels of debt are higher than they perhaps imagine.”