One in three pensioners has debts averaging £17,000

According to a survey, a third of pensioners have debts that need to be repaid, with each person owing an average of £17,000.

This means around 3.3 million pensioners are in debt, with a combined outstanding balance of £58 billion.

This includes credit cards, loans, car financing and increasingly mortgages, as rising costs mean that more and more people cannot pay off their home loans in retirement.

According to research from life insurance company SunLife, these pensioners spend an average of £602 a month to repay their debts.

That works out to £7,226 a year, or around a quarter of the average annual household income of pensioners over 50s.

As many as half a million, or five per cent, of pensioners still need to pay off their mortgage, with the average mortgage debt standing at £63,644 per person.

However, by far the most common type of debt among retirees is credit card debt, with a quarter, 25 per cent, of people owing an average of £3,566. The average monthly repayment is €408.

Mark Screeton, CEO of SunLife, said: ‘While inflation may have fallen from 6.7 per cent this time last year to 2.2 per cent, the cost of living – including the rising cost of debt – is still having a huge impact on the economy. personal finances of retirees.’

Personal loans and car finance accounted for six and eight per cent of loans among pensioners respectively, with over-50s retirees owing an average of £6,918 on personal loans and £12,582 on car finance.

About 72 percent of retirees own their homes.

On average, retirees bought their home 24 years ago, during which time its value will have increased by 317 percent.

This may allow them to use equity release to pay off their debts, although this must be done with caution as the interest charged increases over time and can ultimately be substantial.

It offers homeowners over the age of 55 the opportunity to tap into the value of their home during their retirement by taking out a loan that is repayable upon the sale of their home after their death.

There’s no need to make monthly payments, but releasing equity leaves less as an inheritance to your loved ones. So it may be worth looking at alternative ways to generate income, such as moving to a smaller home to free up cash. .

Screeton said: ‘Of course, equity release isn’t right for everyone, so it’s best to speak to a financial adviser to find out more about the options available and your specific circumstances.’