Updated 03 September 2020
Research shows one in eight retirees still has a mortgage, plus four million are almost £7,000 in debt on average
When you reach retirement age, you hope that the nest egg you’ve been keeping warm has matured into a chick. Or at least a nice lump sum of cash. You certainly don’t want to end up with debts or a mortgage still to pay. Unfortunately, recent research* has found that one in eight retirees (13 per cent) continue to pay off a mortgage in retirement.
As well as that, more than four million retirees (34 per cent) each have an average of almost £7,000-worth of personal debt each. Both situations are not ideal when you no longer have a proper income coming in.
““Debt can be highly manageable as long as you seek advice. Don’t just ignore the problem hoping it will go away”
A social taboo
This situation can be scary and leave people feeling isolated. Especially when it’s such a taboo to be in debt later in life. Being in debt may be laughed off when you’ve just graduated with student loans, but when you reach retirement age, it’s just not the done thing.
Karen Barrett, CEO at unbiased.co.uk, says that these figures are concerning. “This report highlights the need to take sound financial and mortgage advice at the earliest opportunity in order to plan and manage personal circumstances,” says Barrett. “Debt can be highly manageable as long as you seek advice. Don’t just ignore the problem hoping it will go away.”
Ways to boost your retirement funds:
1. Be tax efficient. Use our Tax Waste Calculator to give you a better idea whether you’re paying too much tax.
2. Make sure you’re fully up-to-date with all the state benefits to which you are entitled.
3. Keep a track on any old personal or occupational pension arrangements.
4. Don’t just accept the annuity rate offered by your pension provider. Shop around for the best rate and you might qualify for an enhanced rate because of lifestyle or pre-existing medical conditions. Find out more about annuities.
*Research was conducted online by Research Plus on behalf of MGM Advantage. It polled 2,003 people over the age of 55