Prospective retirees are in serious debt according to Prudential study

The insurance giant Prudential has found out that 20 percent of Brits who intend to retire this year owe an average of £31,200 from credit cards, mortgage debt and overdrafts. However, the Prudential discovered that the owed amount has dropped in comparison to the previous year since more and more people retire with no mortgage debts.

Last year, the mean value owed by a person who planned to retire was about 20 percent higher (£38,200), where as the number of retirees in debt has remained constant at 18 percent in 2012. In Wales, those planning to take their retirement in this financial year are more likely to owe money with 26 percent already in debt and 13 percent of the people in Humberside and Yorkshire expected to carry these debts over into retirement

The average number of retirees who owe money are expected to pay their debts in less than four years, but 12 percent of them do not believe they will ever be free from debt. Prudential revealed that in comparison to the 50 percent who retired last year, 43 percent of those retiring this year are already in debt and will still owe money in the form of mortgages.

Even though the extremely low rates have aided many those with mortgages pay them off a lot faster, the Council of Mortgage Lenders (CML) approximates that 30 percent of those mortgage loans borrowed since 2005 have never been paid on time.

About 19 percent of those retiring in debt this year will owe money in the form of overdrafts; where as 56 percent of them will owe money in the form of credit card debts. These findings come at a time when the annuity rates are very low considering, that they determine the amount of money a retiree receives in their lifetime.

 

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