A fifth of pensioners 'still in debt'

A fifth of people planning to retire this year are still paying off debts, owing an average of more than £30,000 each, research has indicated.

Around 21% of people who expect to start drawing their pension during 2011 admitted they would not be debt-free when they stopped work, with a further 14% saying they did not know if they would still owe money, according to Prudential.
The average person who expects to be in the red when they retire owes £33,100, but one in 20 people owe more than £50,000.

People are most likely to owe money on credit cards at 55%, while 52% said they would still have a mortgage when they retired.

Around 19% of people said they had a personal loan which would not have been repaid by the time they stopped work, and 14% did not think they would have cleared their overdraft.

The situation leaves people financially vulnerable, as they will continue to have significant monthly commitments at a time when their income is likely to have reduced.

Men are more likely still to have debts when they retire than women, at 23%, compared with 18% of women, while they are also likely to owe more, at an average of £39,500 compared with women's £25,100.

Vince Smith-Hughes, of Prudential, said: "These figures show how the class of 2011, a previously risk-averse generation of savers, took advantage of the consumer credit boom of the last decade.

"Total consumer debt in the UK has more than doubled since 2000 and a large number of people planning to retire this year are now faced with spending a significant part of their retirement income meeting these debt repayments."

People in Wales are most likely to have debt when they retire at 37%, while those in the East Midlands are the least likely at just 11%.
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