According to the report, over half of 35-54 year olds and nearly three in ten (28%) 18-34 year olds surveyed expect to owe more than £10,000 upon entering retirement.
Overall, more 2 life predicts that 40% of over-55s will still have a mortgage or overdraft - a jump from last year when just 31% expected to take debt with them into retirement.
Dave Harris, Managing Director at more 2 life, commented: “Unsurprisingly, the over 55s want to be debt free as they enter their retirement years. However, whilst money is being drawn out under pension freedoms, it is not being used to pay down existing debts to any great extent, but rather to replace new, short-term borrowing.
These borrowers may not be aware of the benefits and competitive rates that are now available from equity release lenders. Rates have been declining in the equity release sector and are on average around 4.5%, considerably less than rates on loans and credit cards.
Our research also shows that many people have begun dipping into their retirement pots to replace short-term credit facilities for spending. Many of these individuals will have an ace up their sleeve, however, which will be their property wealth. It’s therefore crucial that retirees are made aware of how they can access the funds, safely and easily.”
