New figures have revealed the desperate debt burdenpensioners are facing. One in three people who release equity in their home in retirement are using it to pay off debts, and the average they owe at this stage is £34,000.
The study, by Key Retirement, found that 31% of those who end up using equity release are doing so in order to clear their debts. And while the average debt they were paying off was £34,000 - one in five of them owed more than £50,000 and one in 14 owed over £100,000.
Mortgage debt is the biggest problem for this group - and almost half of those using equity release to pay debts are clearing mortgages. The average figures outstanding on mortgages are the most striking of all - with an average outstanding debt of £63,000.
The main issue is where people have taken out interest-only mortgages, and not set up any savings or investment vehicle in order to pay off the debt at the end of the period. This leaves them with thousands of pounds worth of debt, and no way to repay it.
In addition, there are others who have been forced to remortgage throughout their life in order to meet the costs of living, or take mortgages later in life as their circumstances changed - often after divorce.
A large chunk of this debt has also been built up on credit cards, with an average credit card debt of £10,000. Loans meanwhile average £11,000, and overdrafts £5,500.
Much of this has been built up during their working life, but there are signs that some is the result of insufficient pension incomes. So, for example, the older people are, the more debt they are likely to be carrying. The study found that those aged between 71 and 75 were most likely to release equity to pay off debts.
Is this a good idea?
Mirfin, unsurprisingly for someone making a living from equity release customers, is upbeat about the approach. He says: "Pensioners are cash poor but property rich and tapping into their housing wealth can help reduce debts as well as supplement other income, freeing up capital for them to afford a more comfortable standard of living or help out family and friends."
This is certainly true, but it does come with a cost. Equity release is usually a lifetime mortgage. This means that those who use it to pay off their mortgage, are simply swapping one mortgage product for another.
With the lifetime mortgage, the difference is that instead of paying interest and repaying the debt each month, it rolls up. The full amount is only paid off when your home is sold - usually after your death. Depending on how long you live and how much you borrow, this can increase your debts substantially, so some people end up owing more than twice the sum they borrowed.
This may not be an issue, especially when you have a large and valuable home, but is something both you and your loved ones need to be aware of.
As a result, it's essential that those closest to you know what you are doing. Otherwise there is a risk they are basing their own financial planning on an inheritance that may never come.
Advisers suggest that anyone in this position looks at all the other options open to them as well. This includes taking advantage of pension freedoms, making a financial arrangement with family members, downsizing your family home and freeing up cash, or considering ways to make money to cover debt repayments - from going back to work to renting out a room in your home.
Of course, ideally this is the kind of issue we need to tackle long before we get to retirement. It's one of the reasons that those with around ten years to retirement are encouraged to take a good look at their finances, to check they will be able to enter retirement debt-free, and if they are not on course to do so, to act quickly while they are still working and have a bit more flexibility to do something about it.