A growing number of people are entering retirement saddled with debts. This new research shows that two in five over 55s will carry debt into retirement.
Debt isn't necessarily a bad thing. When it is affordable and manageable, with a clear plan to avoid taking on more and repay the debt you have, it can be tolerable to have some debt in retirement.
However, debt is a drag on your ability to achieve financial goals in life.
Despite living in a low interest rate environment currently, unsecured debts especially can be very expensive to service.
When living on a fixed income in retirement, the opportunities to repay debt can be limited compared to during your working lifetime.
Part of a comprehensive retirement plan should include plans to repay all debt before finishing work, including any mortgage on your home.
“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.”