One in five retiring this year have debts of over £33,000

Graham_Devon

Makes you wonder how....but...

Mortgages and credit cards account for most of the borrowing.

One in 20 will retire with outstanding debts of more than £50,000, rising to one in 10 among men over the age of 65, according to a survey carried out by Prudential, the insurer.

Men are more likely than women to carry debt into retirement – around 23pc of men surveyed said they would still owe money when they retired, compared with 18pc of women. The average debt owed by men is also substantially higher at £39,500, compared with £25,100 for women.

The average figures mask wide regional variations. Debts in retirement were most common in Wales, where 37pc of people retiring this year said they would still owe money. The figure in the east Midlands was just 11pc.

The highest average debts in retirement were in the South-West, where those retiring this year owed £69,100 each, while new pensioners in the North-East owed a more manageable £12,700 each, the survey found.

Of those that had debts, 52% had not paid off their mortgages.

Really surprised me.

Makes me wonder how my generation will fair!! We seem to love credit even more.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/8281679/Debts-of-33000-for-one-in-five-pensioners.html

silvercar

Of those that had debts, 52% had not paid off their mortgages.

If they have a mortgage they can't have cleared their debts. So for half those with debts it could just be that they haven't yet paid off their mortgage - but they may have a plan for doing so.

smeagold

silvercar wrote: »

If they have a mortgage they can't have cleared their debts. So for half those with debts it could just be that they haven't yet paid off their mortgage - but they may have a plan for doing so.

or may not, as the case may be.

Graham_Devon

silvercar wrote: »

If they have a mortgage they can't have cleared their debts. So for half those with debts it could just be that they haven't yet paid off their mortgage - but they may have a plan for doing so.

That's what its saying. For those with outstanding debt, 52% of them hadn't paid off their mortgages....therefore, were in debt.

Not sure what "plan" they could have, apart from downsizing, releasing equity etc.

The whole point of the survery was to ask these people, when they retire, will they still owe more than they have. I.e. debt.

I'm just surprised so many still have mortgages, at retirement age. Surely that's got to be something to do with MEW'ing? Especially for the generation we are looking at, who, as was said, have had the most favourable conditions for housing out of all current generations.

ceridwen

As a middle-aged person myself - I don't understand how come they have any debt or mortgage at all .....

I've certainly always worked on the basis that my mortgage and debt had to be gone before I reached retirement age - in order not to prejudice my chances of retiring bang on time.

The thought of having to work on into retirement is :eek: - and there was no way I was going to put myself at risk of having to. Add the fact that there arent many jobs out there - and I believe those there are should go first and foremost to working agegroup people....it was just a no-goer to still have any mortgage or debt by the time I shall be retiring.

Rainmaker_uk

As long as their pension or investments can keep up with the mortgage repayments then there is no issue - but one's got to wonder whether those that have not planned well enough to pay off debt by retirement will have decent pension or investment provision... :eek:

nicko33

Graham_Devon wrote: »

Not sure what "plan" they could have, apart from downsizing, releasing equity etc.

waiting for investments to mature?
maybe a lot of endowment policies yet to mature from the bad old days?
I've still got a small one running from 3 or 4 houses ago maturing next year. How many of these people might have too?

diable

ceridwen wrote: »

As a middle-aged person myself - I don't understand how come they have any debt or mortgage at all .....

I had envisaged being mortgage free by the age of 50 but divorce and paying for the children then starting life over again leaves me with paying my mortgage off when I am 64, other people may be in a worse situation.

Graham_Devon

nicko33 wrote: »

waiting for investments to mature?
maybe a lot of endowment policies yet to mature from the bad old days?
I've still got a small one running from 3 or 4 houses ago maturing next year. How many of these people might have too?

Yes. May apply to some.

But reality suggests theres a massive problem here, and it's only getting bigger.

Sorry, but I really can't see all those people with such debts all have investment plans in place all ready to pay off the debts, especially considering Age Concern and Saga are viewing it as such a big problem.

silvercar

Could be that they plan to downsize in retirement but think they will hold on a couple of years to see if house prices improve.

LilacPixie

Would anyone actually willingly retire if they did not have the means/ability to service their commitments?
I also wonder how much is joint debt IE man 63 and wife 53 have a 10k loan, he plans to retire next year and will have 10k debt but as she isn't retiring debt still paid. I am wondering if mortgage are something similar, joint mortgage one party retiring other not so no issue. There is also the issue that many may of got stung with underperforming endowments so had to remortgage to repayment at some point in the last 10 years.