Most people approaching retirement are planning a comfortable and relaxing time; nearly one in five giving up work this year will do so with a millstone of debt.
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But a fifth of this year’s retirees will owe almost £22,000 each.
And around 10% of this year’s retirement draft doubt they will have paid the money off for at least nine years.
The figures come from financial firm Prudential, which keeps a regular eye on money matters of retirement savers.
Sadly, the number retiring with debt this year is up on last year’s figure – 19% compared with 17%.
Mortgages and credit cards
Prudential has kept watch on the debt figure for three years, and although the number of new retirees with debt has stuck around the 20% mark, the average owed has steadily fallen away.
In 2012, the average was 43% more at £38,200.
Most retirees reckon they will have settled their debts in three years, but besides those who believe they will take up to nine years to pay, another 5% do not believe they will ever be debt free.
Mortgage (43%) and credit card (55%) borrowing make up most of the debt.
This money owed has a negative impact on retirement incomes, because although this year’s new pensioners will have a higher expected income than those in previous years at £17,000, a huge chunk is going out to service debts.
This makes seemingly more affluent pensioners finding their cash flow is stretched for the early years of their retirement when they want to be at their most active.
According to the survey, average debt payments are £200 per month on a £1,416 per month gross pension income, ranging up to £500 a month for 14%.
Men are more likely to retire with debts than woman, although women owe more money.
Around a fifth of men retire with debt, even though the amount has dropped from £28,400 last year to an average £19,700.
About 16% of women retire with debt, owing £24,900 this year compared to £20,700 a year ago.
Stan Russell, a retirement expert at Prudential, said: “The research shows a downward trend in the average amount of debt for people retiring this year.
For many, retirement is a time to review budgets. Debts will make this harder. Debt not a major retirement issue providing people have a realistic repayment plan in place.”
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