New research from MGM Advantage, the retirement income specialist, shows the UK’s retirement nation collectively manages mortgage and personal debt to the tune of £105.5bn. 13% of retirees are managing mortgage debts totalling £76bn, while 34% of retired people are managing loans, overdrafts and credit card debts worth a cumulative £29.5bn.
- Over four million retirees (or 34% of retirees) each have an average of £6,952 personal debt
- One in eight retirees (13%) continue to pay off a mortgage in retirement, collectively worth £76bn (average of £47,458 per person)
- 10% of people in retirement each manage a personal debt worth over £5,000
- 6% of retirees aged 55 and over work part-time to supplement their income
Andrew Tully, pensions technical director, MGM Advantage said: “These figures are alarming and show the pressure people face on a daily basis trying to balance the household budget. Although many people consider themselves retired they are continuing to pay off their mortgage, some with quite substantial balances. Dig a little deeper and many people are working part time, sometimes through choice but often simply to make ends meet.”
Tully concluded: “Talking about debt in retirement will be a taboo for many people who find themselves in this position. But there are ways retirees can access practical help and advice.”
MGM Advantage has published a checklist of things for people to consider when making important decisions at retirement:
1. Claim all state benefits to which you are entitled, to check, go to www.gov.uk/benefits-adviser suggests that pensioners are missing out on up to £5 billion a year in unclaimed pension credit, housing and council tax benefits, as well as attendance and disability living allowances
2. Keep a track on any old personal or occupational pension arrangements. If you think you might have lost track of an old pension arrangement, you can check via the Department for Work and Pensions tracing service here www.gov.uk/find-lost-pension
3. You can check if you have any old savings accounts which you might have lost touch with over the years by going to www.unclaimedassets.co.uk
4. Don’t just accept the annuity rate offered by your pension provider. You should shop around for the best rate and you might qualify for an enhanced rate because of lifestyle and/or pre-existing medical conditions
5. Seek professional financial advice as this will help you get the best product and rate for your individual circumstances. To find an independent adviser go to www.unbiased.co.uk
6. You may have old National Savings accounts or Premium Bonds. To check for unclaimed prizes please go to www.mylostaccount.org.uk or contact NS&I here www.nsandi.com for further information.
Seven in ten retirees (70%) own their own homes outright with no mortgage, while 16% live in rented accommodation.
2% of retirees live with family or in other types of accommodation, while 13% own their property with a mortgage.
Nearly two in three retirees over the age of 55 have no personal debts (66%). 34% of retirees have some personal debt, with 70% of those people managing debts of £5,000 or less.