One in five retiring with debts

26/01/12

By Emma McFarnon

Many of us might assume we will have cleared our debts by the time we retire, but it has emerged that a fifth of those stopping work this year will do so owing money.

The 2012 retirees will, on average, owe £38,200 - some £5,000 more than those who left work last year. That is according to an annual report from Prudential.

It appears many are becoming more savvy as they near retirement, however, as the proportion of people retiring in debt this year, 18 per cent, has fallen slightly from 20 per cent last year.

The average person planning to retire with debts this year will part with one fifth of their expected monthly income in order to make repayments, spending £260 of their £1,290.

Some 51 per cent of those in debt say they are experiencing difficulty with their outstanding credit card bills.

The Prudential research, which included more than 1,003 people retiring in 2012 across Britain, found that people in Wales are the most likely to have debts while those in the East Midlands are the least likely.

Vince Smith-Hughes, Prudential's retirement income expert, said: "With a manageable repayment programme in place, debts need not become an issue for this year's retirees - and there is plenty of help available through the Money Advice Service and Citizens Advice Bureau."