Over 55s Entering Retirement With Debt Problems

Thu, 11 Feb 2010

A large number of Brits aged 55 to 64 are entering retirement with debt problems, according to new research.

A study by insurance giant Aviva found that 40 per cent of ‘pre-retirement’ people are fail to put any money aside for their future each month, largely due to the fact that many are still working to pay off debts, including their mortgage .

The ‘Real Retirement’ report showed that a fifth of people in the 55 to 64 age bracket still owe at least £75,000 on their mortgage when they approach retirement .

It also revealed that the same proportion (20 per cent) are struggling to live on their less than £750 a month.

When compared with the retiring (people aged 65 – 74) and the long-term retired (75-plus), Aviva found that pre-retirees have the lowest savings (£8,593), the highest level of debt (£2,851), the lowest incidences of home ownership (76 per cent) and largest average mortgages (£16,694).

Clive Bolton, at-retirement director for Aviva Life, said the findings paint a "worrying picture".

He explained: Those who are already retired are actually – to a large extent – financially better off than the pre-retirees."

"Their income might shrink as people retire, but the current generation of retiring and long-term retired have a higher incidence of homeownership, lower debts and more savings than the pre-retirees."

The ‘Real Retirement’ report was based on a survey of 1,200 individuals throughout the UK.
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