Many of us dream of being able to retire in comfort with our debts paid and a pension to live on. However, according to new research, more and more Brits are retiring with credit card and personal loan debts. One in five of us now reach our retirement with debts of £33,100, resulting in some tough choices for over 55s looking to give up work.
Credit card, mortgage and personal loan debts increasing for over 55s
The survey from the Prudential found that for men over the age of 65, the situation is even bleaker, with one in 10 facing debts of over £50,000.
The research found that credit cards were the biggest problem, with 55 per cent of those retiring in debt struggling to clear their bills. In addition, 53 per cent of respondents had not been able to pay off their mortgages before their retirement.
Commenting on the statistics, Una Farrell of the Consumer Credit Counselling Service (CCCS) said: “The current batch of over-55s are in a difficult position. Many are having children later who could still be at university and they may also have parents who are still alive, so they are sandwiched between two financially dependent generations.”
Low income and high debt cause retirement problems
Figures from the CCCS show that, of its clients aged over 55, the average unsecured debt is £25,826. This includes both credit cards and personal loan debt. Considering that the average income for over-55s is £12,920, it is easy to understand how retirees may find themselves having to make difficult financial decisions.
“They have a lot of unsecured debt at a time when their income is declining and their earning potential is decreasing, so this issue really does need to be addressed,” says Ms Farrell.