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Retirement debt: 13 figures causing concern

Not everyone can retire debt-free. With retirement income being hit by monthly debt repayments, it is best to seek help from an adviser.

At a time when the base interest rate is expected to rise, it is worrying that nearly one in five people expecting to retire this year still have debts to clear. Overall, fewer people are retiring in debt. However, the amount of debt people are retiring with is now 40% higher than for those who expected to retire last year. 

Expected retirement incomes have increased for the fifth year in a row. This may mean some people feel more comfortable about servicing debt, and are borrowing more. Meanwhile more and more grandparents are helping their grandkids with university fees and children with house deposits.

But with debt repayments averaging £285 a month, they take a substantial slice of monthly retirement income. This will make budgeting tougher at a time when most people’s income drops as they stop work. 

It is not always possible to be debt-free at retirement but free information on debt management is available from government guidance service Pension Wise. Many will also benefit from a consultation with a financial adviser, preferably before giving up work.

 

At a time when the base interest rate is expected to rise, it is worrying that nearly one in five people expecting to retire this year still have debts to clear. Overall, fewer people are retiring in debt. However, the amount of debt people are retiring with is now 40% higher than for those who expected to retire last year. 

Expected retirement incomes have increased for the fifth year in a row. This may mean some people feel more comfortable about servicing debt, and are borrowing more. Meanwhile more and more grandparents are helping their grandkids with university fees and children with house deposits.

But with debt repayments averaging £285 a month, they take a substantial slice of monthly retirement income. This will make budgeting tougher at a time when most people’s income drops as they stop work. 

It is not always possible to be debt-free at retirement but free information on debt management is available from government guidance service Pension Wise. Many will also benefit from a consultation with a financial adviser, preferably before giving up work.

 

 

Source: 2017 Prudential survey of 9,896 non-retired UK adults aged 45+, including 1,000 planning to retire in 2018

 

Source: 2017 Prudential survey

Source: 2017 Prudential survey

 

Source: 2017 Prudential survey

Source: 2017 Prudential survey

What forms of debt do those planning to retire in 2018 expect to have on retirement? Click through to find out. 

Credit card bill

 

Outstanding mortgage

 

Overdraft

 

Outstanding bank loan

 

Outstanding hire purchase agreements

 

Money borrowed from family

 

Money borrowed from friends

 

Other

 

Money borrowed from an unregulated lender (e.g. a loan shark)

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