Brits retire with £66billion of debt

14 August 2008 / by Daniela Gieseler
More than one in three Brits have outstanding debts when they reach retirement age, including unsecured loans, credit cards and overdrafts, research from Key Retirement Solutions found.

The average Briton who is aged 55 or older has more than £11,000 in outstanding debt, totalling a whopping £66billion. This estimate does not even take into account outstanding mortgage debt, which was on average £37,316 per person.

Around a quarter had taken out a loan and on average still owed £8,766 per head, while a fifth had an average £8,358 of outstanding credit card debt. Only three per cent had gone into the red in their current accounts, but that proportion owed on average of more than £3,500 on their overdrafts.

The situation seems to worsen the further people progress into their retirement, as the over 70s alone owe £22billion – a third of the total amount of debt in Britain. Unfortunately, with food and utility costs skyrocketing, this trend is bound to continue.

Dean Mirfin, business development director at Key Retirement Solutions said: "The cost of living for the elderly has surpassed inflation over the past decade, therefore it is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt."

For the over 55s, credit card debt alone has hit £28billion, which is a particularly dangerous form of debt because, in most cases, the debt with the lowest interest is paid first, and people who miss monthly minimum repayments incur an average fee of £12 for late payments.

Chris Tapp, director of the charity Credit Action, comments on Key's findings: "In recent years there has been a ‘buy now, worry about it later' culture in the UK when it comes to borrowing, particularly on unsecured forms of credit. For many pensioners today these figures show it's a case of ‘bought then, worrying about it now.'

"With the cost of living increasing dramatically - particular as winter approaches and fuel costs mount up," Mr Tapp added, "it is vital that those struggling are given the help they need to ensure that people aren't trapped by debt but are given the necessary advice and support to enable them to stay in control of their money and their lives."

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