Nearly one in five of those planning to retire this year will have debts averaging £31,200, according to Prudential.
In a study of 8,676 UK non-retired adults, Prudential has found the average owed by people retiring with debts in 2013 has actually fallen since last year (£38,200 in 2011).
Less of this year's retirees owe money on their mortgages. Last year, half of this year's retirees owed mortgage repayments. This has fallen to 43% this year.
However, there is greater unsecured borrowing debt. More than half (56%) owe money on credit cards, while a fifth (21%) have outstanding bank loans and 19% have overdrafts - an increase from 13 % last year.
Average monthly debt repayments have also fallen to £215 compared to £257 the previous year. However, 22% of retirees have monthly repayments exceeding £400. On average retirees with debts expect it will take under four years to clear the money they owe while 12% expect never to be debt-free.
Vince Smith-Hughes, Prudential's retirement income expert, said: "The fall in average debt owed by this year's retirees is a welcome sign that people are paying off some of the money they owe before they stop working.
"Debt does not have to be a major issue for people in retirement as long as they have sufficient income, and realistic and manageable repayment programmes in place. There is plenty of free help and advice available through the Money Advice Service and Citizens Advice Bureau for those with debt issues."
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