The equity release broker has found that one in three pensioners have an outstanding mortgage, owing an average of £43,069 per head. Mortgage debts total over £140bn.
As for personal loans, one in five have outstanding loan payments owing £10,871 on average per head, with overall loan debts total over £22bn. Also, KRS found that 20 per cent of those over 65 have outstanding credit card debts and owe £8,892 on average per head and their debts total over £18bn.
Key Retirement Solutions group director Dean Mirfin says: “Whilst these figures are based on those who have come to KRS to release equity from their homes, even if the levels are only partly reflective of the true picture for today’s pensioners, the future is looking gloomy for many who will spend their retirement repaying debt.
“Many look at retirement as a period when we should be free of any debt worries and enjoying our retirement incomes to the full. Of great concern is the fact that the 70 and over age group carry the bulk of the debt showing that the problem is evident well into retirement. Over 66 per cent of the total debt is held by those aged 70 and over.”
Credit Action director Chris Tapp says: “Debt and credit has become, in the past decade, a central feature of the way individuals manage their money and, despite what many may think, those over-65 are no exception to this.
“Unfortunately, as the events of the last year have shown, this trend is unhealthy and in many cases, unsustainable. For those pensioners now burdened with high levels of debt – and this research shows that such people are distressingly numerous – the reality of living with such financial baggage is often a hugely stressful experience, at the very time of life when one would hope such concerns would be a thing of the past. Ensuring pensioners are given the free and independent money advice and help they need really should be a priority in the coming months.”