The big 5 - 0 is considered one of life’s biggest milestones, with many looking forward to enjoying the financial freedom that has traditionally come to those approaching retirement.
For some this is the case, with credit cards, student and personal loans finally paid off – for the majority though, the debts accumulated over the lives’ will remain throughout most of their retirement.
Those that are lucky enough to clear the majority of their debts before entering retirement do so at an average age of 52 and three months. Those living in London stand the best chance of enjoying an early, debt-free retirement, with the average retirement age being just short of 43 years. This is likely to be down to the large wages and property values compared to other areas of the country.
As mentioned, for the most part, people’s debts are carried on into retirement, moreover, those that manage to clear themselves of credit card and personal loan debts still have a major debt to tackle – their mortgage.
It is estimated that one in five pensioners have an outstanding mortgage of £38,000 with one in eight still owing a staggering £50k!
What this means for the majority of those in their late 50s and early 60s is that they have to remain in employment in order to maintain their financial commitments. It is estimated that around 160,000 pensioners are still using credit cards to cover day to day expenses and household bills, a great deal of whom do not manage to meet the required monthly repayment.
Those approaching retirement are faced with two options; they can either cash in their pension and face a lower income throughout their retirement or hang onto their pension but remain in employment.
The credit crunch has led to a 20% reduction in value of personal pension schemes, which has resulted in financial experts advising people in this situation to hol
With an estimated 60,000 people over 80 still repaying their mortgage, outstanding debt is a major problem. If you are suffering from debt problems then it is advised you contact your local CAB (Citizens advice bureau) who will help draw up a debt management plan based on your situation.
Liam is a UK based writer.
