Over a third of over 55 year olds have outstanding unsecured debts and could be heading for retirement collectively £66bn in the red, averaging over £11,000 per head, according to Key Retirement Solutions.
Research also found over £28bn is owed by over 55s on credit cards alone, while the average personal loan debt is nearly £9,000.
The study, based on approximately 4,500 people in the UK aged 55 and over who released equity in their homes with Key Retirement Solutions, found the situation worsens when taking into account the average outstanding mortgage debt which stands at £37,316 a person for this age group.
The greatest concern is people are seemingly getting deeper in debt the further they go into retirement, according to Key Retirement Solutions.
Over 70s are most at risk with total unsecured debt exceeding £22bn. Total unsecured debt for those aged 55-59 is over £2.5bn, increasing 747% for the over 70s, who on average owe £10,659.
With voluntary pension contributions by UK adults halving in the past 12 months and the price of goods and services purchased by pensioners rocketing by 36% since 1998, the trend of indebted pensioners looks set to continue, says the company.
Dean Mirfin, business development director at Key Retirement Solutions, says: “Retirement should be a time to enjoy yourself after all those years of hard work, yet 1 in 20 people in their 60s, 70s and 80s admit to constantly struggling to keep up with financial commitments or having fallen into arrears.
"The cost of living for the elderly has surpassed inflation over the past decade therefore it is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt."
Chris Tapp, director of charity Credit Action, says the figures show for many pensioners today, it's a case of ‘bought then, worrying about it now'.
“With the cost of living increasing dramatically, particularly as winter approaches and fuel costs mount up, it is vital that those struggling are given the help they need to ensure that people aren't trapped by debt but are given the necessary advice and support to enable them to stay in control of their money and their lives.”IFAonline
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