%VIRTUAL-SkimlinksPromo%One in 12 people planning to retire this year will still be paying off their mortgage.
Prudential, which carries out research each year to gauge the state of people's finances as they approach retirement, found that one in six (17%) people ending their working lives in 2014 will still be burdened with some form of debt, including mortgages, credit cards or personal loans.
Some 8% of those planning to retire in 2014 said they still have not fully paid off their mortgage and around 10% still have credit card debt piled up.
On average, those who still have some form of mortgage and/or non-mortgage debt owe £24,800, although this figure is around one fifth (21%) lower than the typical debt in 2013 of £31,200, researchers found.
Across Britain, Scotland had the highest rate of people retiring this year with debts outstanding. Nearly one quarter (24%) of people retiring in 2014 there said they would have some form of debt.
Wales and the North West were the next most likely areas for retirees to owe money, with 21% of people in both of these areas saying they would retire in debt.
Retirees living in the North East and Yorkshire and Humberside were the least likely, with just 11% of people in these regions saying they would still be paying off some form of loan.
Women have cut their debts more significantly than men compared with a year ago, the research found.
On average, women retirees with debts will owe £20,700 this year, which is £7,400 less than last year.
Men will owe £28,400, which is £5,400 less than male retirees in 2013.
Those with debts expect to take four years on average to clear what they owe. But nearly one fifth (18%) of retirees with debts said it will take seven years or longer. One in 50 (2%) of those in debt believe they will never fully clear them.
Concerns have been growing for people who are still sitting on large amounts of mortgage debt. Last year, a report from Bristol University and the International Longevity Centre (ILC-UK) found that about two-fifths (40%) of people aged 75 and over and who still have a mortgage to pay off have an interest-only mortgage with no linked investment with which to pay their loan back.
Interest-only mortgages, which allow borrowers to pay off the capital only when the mortgage term ends, have become much thinner on the ground since the boom years amid concerns about people not being able to pay back their debt.
The Financial Conduct Authority (FCA) has previously found that home-owners have been failing to put enough money aside on up to half of the 2.6 million interest-only mortgages which are due for repayment over the next 30 years.
Mortgage lenders have been alerting their most at-risk customers to help them avoid "payment shocks'', but some borrowers could end up having to sell their home to pay the loan back if they do not take stronger control of their repayment planning.
Stan Russell, a retirement expert at Prudential, said that while the research shows a "welcome downward trend" in the debts people will be carrying into their retirement, it is "clearly sensible" to make sure that debt does not eat into retirement incomes too much for too long.
He said: "Paying off debts as early as possible - and ideally while still working - will help to increase disposable income in the early years of retirement."
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship. Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so. To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension. In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.
Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.
The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.
Around 427,000 households in the over-70 age groups are either three months behind with a debt repayment or subject to some form of debt action such as insolvency, according to the Consumer Credit Counselling Service (CCCS).
Its figures also show that those aged 60 or older who came to the CCCS for help last year owed an average of £22,330. Whether you are retired or not, the best way to tackle debt problems is head on.
Free counselling services from the likes of CCCS and Citizens Advice can help with budgeting and dealing with creditors.
Importantly, they can also conduct a welfare benefits check to make sure you are receiving the pension credit, housing and council tax benefits, attendance and disability living allowances you are entitled to.
The average UK pensioner household faces a £111,400 tax bill in retirement as increasing longevity means pensioners are living on average up to 19 years past the age of 65, according to figures from MetLife. And every year in retirement adds an extra £5,864 in direct and indirect taxes based on current tax rates to the costs for the average pensioner household. You can be forced to go bankrupt if you fail to pay your taxes, so it is vital to factor these costs into your retirement planning.It is also important to check that you are receiving all the benefits and tax breaks you are entitled to if you want to make the most of your retirement cash.
The cost of a room in a care home in many parts of the country is now over £30,000 a year, according to figures from Prestige Nursing and Care. So even if the prime minister announces a cap on care costs - last year the economist Andrew Dilnot called for a new system of funding which would mean that no one would pay more than £35,000 for lifetime care - families will still face huge accommodation costs. Ways to cut this cost include opting for home care rather than a care home. Jonathan Bruce, managing director of Prestige Nursing and Care, said: "For older people who may need care in the shorter term, home care is an option which allows people to maintain their independence for longer while living in their own home and should be included in the cap." However, the only other answer is to save more while you can.
Older Britons are often targeted by unscrupulous criminals - especially if they have a bit of money put away. For example, many over 50s were victims of the so-called courier scam that tricked into keying their pin numbers into their phones and handing their cards to "couriers" who visited their homes. It parted consumers from £1.5 million in under two years. Detective Chief Inspector Paul Barnard, head of the bank sponsored dedicated cheque and plastic crime unit (DCPCU), said: "Many of us feel confident that we can spot fraudsters, but this type of crime can be sophisticated and could happen to anyone." The same is true of boiler room scams that target wealthier Britons with money to invest, offering "once-in-a-lifetime" opportunities to snap up shares at bargain prices. Tactics to watch out for include cold calling, putting you under pressure to pay up or lose the opportunity for good, and claiming to have insider information that they are prepared to share with you.