Many set to retire with debt burden

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A FIFTH of people planning to retire this year are still paying off debts, owing an average of more than £30,000 each.

Around 21 per cent of people who expect to start drawing their pension during 2011 admitted they would not be debt-free when they stopped work, with a further 14 per cent saying they did not know if they would still owe money, according to Prudential.

The average person who expects to be in the red when they retire owes £33,100, but one in 20 people owe more than £50,000.

People are most likely to owe money on credit cards at 55 per cent, while 52 per cent said they would still have a mortgage when they retired.

Around 19 per cent of people said they had a personal loan which would not have been repaid by the time they stopped work, and 14 per cent did not think they would have cleared their overdraft.

The situation leaves people financially vulnerable, as they will continue to have significant monthly commitments at a time when their income is likely to have reduced.

Men are more likely still to have debts when they retire than women, at 23 per cent, compared with 18 per cent of women, while they are also likely to owe more, at an average of £39,500 compared with women’s £25,100.

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