The UK's pensioners have a collective £183billion of debt, which could be relieved using equity release, according to new research from Key Retirement Solutions (KRS).
Based on the customers who used an equity release plan from KRS to unlock money from their home in 2008, the data shows that more than 55 per cent of British pensioners aged 65 or older have outstanding debts.
The average mortgage debt among pensioners, which applies to the one in three who still have an outstanding mortgage when they retire, is more than £43,000, accounting for more than £140billion total pensioner mortgage debt.
Pensioners also have an average personal loan debt in excess of £10,000 each, with one in five having outstanding debt when they reach retirement, a collective £22billion.
Pensioners also owe at least £18billion in credit card debt, with one in five people still having credit card debt when they retire; the average pensioners' credit card debt exceeds £8,000.
More than £1billion worth of overdraft debt can also be attributed to the over 65s; while fewer than three per cent of pensioners are in the red, those that are have gone overdrawn by an average £5,107.
The KRS research also found that the further into retirement someone gets, the bigger their total debt; 65-69 year olds have an average £29,053 of debts, while the over 70s owe an average £35,782, and KRS is concerned about the pressure of monthly repayments on pensioners' incomes, with debt repayments accounting for an average £308 of monthly outgoings for retirees.
Dean Mirfin, group director at KRS, said that even though figures only represent Key Retirement Solutions equity release customers, if it is only partly reflective of the wider demographic then "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," he said.
Chris Tapp, director of charity Credit Action, added: "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."
Equity release is not right for everyone, so get equity release advice to see if it can help you.
© Fair Investment Company Ltd