Recent figures released from Prudential state that the average sum owed by people retiring is over £24,000.00.
Although most of the people surveyed expected to pay off their debt within four years of retirement it is still a sobering fact that a substantial proportion of people in the UK are entering retirement burdened with debt.
Last year Prudential found one in five people expected to retire with unpaid personal loans averaging £18,800.00.
These figures just relate to unsecured debt and do not account for secured debt, typically mortgages. The figures here show that forty percent of people retiring in 2017 still have mortgages to pay.
The figures have a regional divide; twenty percent of retirees in London in 2017 expect to retire with debts compared to the UK average of twenty percent. The lowest figure of people retiring with debts is the North East where seven percent of people retiring in 2017 will do so with debt.
The regional difference can be attributed to the impact of mortgages. London, with by far the highest property prices in the UK need more support for those high house prices by way of mortgages. Of course, due to the high house prices in London and the South East the relative equity in a retired persons property in this area is far greater than the equity in other retired peoples property in the country, particularly the North.
How to Avoid Debt Later in Life
Planning is the key. Most people don’t plan adequately for retirement and consequently don’t take action to provide a sufficient income in retirement whilst they’re working.
The starting point for people planning for retirement should be too seek advice either by an independent financial advisor (IFA) or using internet tools such as the government’s Pension Wise guidance service.
The new workplace pension has also focused people’s minds on pensions and retirement but there needs to be much more work to be done to allow people a comfortable debt free retirement.
If you have found yourself with issues of personal debt, Farleys Solicitors can help. Our experts can provide comprehensive and practical debt advice so you don’t have to struggle alone. To speak to us about your debt worries please call 0845 287 0939 or submit your enquiry through our online contact form.