Retiree debt falls for third consecutive year

The average debt owed by retirees has fallen for the third consecutive year, according to research by Prudential.

Data reveals that the average person retiring in 2015 will owe £21,800, down from £24,800 in 2014 and £31,200 in 2013.

This is a 43% drop in the last 3 years.

However, the proportion of indebted retirees has risen among people retiring in 2015. Almost a fifth (19%) will go into retirement with debts in 2015, up from 17% of 2014 retirees. It is estimated that it will take the average retiree from the ‘Class of 2015′ 3 years to settle their debts.

The survey also revealed:

43% of this year’s retirees still have to pay off their mortgage
55% have credit card debts
9% say it will take more than 9 years to pay back their debts
5% don’t think they will ever pay off their debts.
There is also a difference between the debt levels of men and women. Men retiring this year owe an average £19,700, while the average woman owes £24,900.

Stan Russell, a retirement expert at Prudential, said:

“Our new research shows a welcome downward trend in the average amount of debt for people retiring this year. However, it is a concern that the proportion of people reaching the retirement milestone still owing money is refusing to fall.

“For many, retirement is a time in life when it is necessary to re-assess household budgets, and any debts outstanding will inevitably make this job more difficult. Citizens Advice Bureau can provide free help on managing and paying off debt, and the pensions Advisory Service can help with retirement income planning and related issues.”

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