It is expected that the number of people retiring in debt will reach a record number of one in four in 2017. Whilst the majority will manage to get out of debt within four years, for nearly one in five it will take at least seven years to become debt-free and nearly one in ten fear they will never get out of the red and repay their debts.
The research by Prudential found that the sum owed on average would be £24,300, the bulk of this figure being made up of mortgages. The figures have been described by Andrew Pennie, Head of Pathways at Intelligent Pensions as ‘deeply worrying’ and showed that ‘a growing number of people are likely to struggle financially in retirement’.
The average debt owed by the retirees of 2017, is 29% higher than what was owed by people retiring in 2016. This steep rise has been blamed on growing property prices and credit card loans.
This new research comes after The Bank of England’s warning earlier this year regarding the high level of household debt. Mark Carney, the bank’s governor, stated that the bank is keeping a close watch on the growing debt levels, specifically, unsecured debt. Unsecured debt includes credit cards and overdrafts, which is rising at its fastest pace since before the financial crash in 2008.
If you are in debt and struggling with repayments, or worried about retiring with high levels of personal debt, we highly recommend seeking advice sooner rather than later. Clive can help you put a plan in place to escape debt and regain control of your finances and life.
To discuss your situation and receive sensible debt advice please contact Clive on 01656 661426 or click here to contact him.
Please note: This article is a commentary and should not be interpreted as advice for your specific situation.