With thousands of people planning their retirement this year, staggering new research from Prudential has shown that one in six will enter retirement with heavy debts, averaging at £24,000.
The report highlights how even those thought to be financially stable by the majority of us, may not be as immune to debt as previously believed. Surprisingly credit cards were the most common form followed closely by mortgages. Of those surveyed and in debt, over half owed money on credit cards and 44% will enter their retirement without having paid off their remaining mortgage.
Although equally likely to have retirement debts, the research showed that women were more likely to enter retirement with reduced levels owing £20,700 on average, whilst men were likely to owe around £28,000. Monthly repayments are believed to be around £400 for those suffering and whilst most believed they could be debt free within four years, 20% of respondents believed it may take seven years or more to wipe away their financial issues.
The report did highlight some ominous tones for those of retirement age but there may be some light at the end of the tunnel. As a general trend the percentage of retiree’s with debt has fallen by 4% and the average value of debt has followed suit, reducing to £24,800 from £33,100 since 2011.
It always amazes us when retirees come to McAlister & Co for advice thinking that due to their age the only option is bankruptcy. There is a wealth of options available to those in retirement and living with debt; a DRO (Debt Relief Order) or an arrangement with creditors may suit your needs and keep your house yours. If you need advice about your levels of debt and are entering, or currently in retirement then contact us for free professional qualified advice.