Retiree debt totals £105.5 billion

The Momentum UK Team 13 May 2013

Retirees hold collective debt totalling around £105.5 billion according to a report from MGM Advantage.

One in eight retirees have yet to pay off their mortgage debt, with an average amount of £47,458 still owed, collectively amounting to £76 billion in unpaid mortgages.

Personal debt owed by retirees, such as that derived from loans, overdrafts and credit cards totals at £29.5 billion according to the report.

While two in three of those who are retired and over the age of 55 have no personal debts, of those in personal debt 10% owed £5000 or more.

Andrew Tully, pensions technical director at 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."

Of those surveyed, 6% were still working part time to supplement their retirement income.

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.

Tully said:

"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."

According to latest figures from the charity credit action released today, average household debt in the UK remained stubborn from February to March, rising by just £1 to £53,995 (figure included mortgage debt).

The report by Credit Action said that £164 million in interest was paid every day on personal debts, and £1.585 billion worth of transactions were made on plastic card purchases.