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According to the latest study from Aviva, two thirds (67%) of Brits admit to having debt that’s weighing them down
Almost one in 10 (nine percent), or the equivalent of just over five million adults in the UK, ‘haven’t got a clue’ how much they owe in outstanding debts and worryingly this figure rises to more than one in six (16%) of those aged 45 and over.
Additionally, one in seven (15%) feel their debt is out of control or they have no way of paying it off - with this figure rise to 18% of over those aged 45-54, while one in ten (11%) over 55s say they are also struggling.
Predictably, the most common form of debt (32%) is credit or store card debt (30% of over 55s), followed by 16% who have personal loans and 15% who have overdrafts. Meanwhile, 10% say they have unpaid household or utility bills, and more than one in ten (11%) of the over 55 age group have mortgage debt in the final decade or so before retirement.
Although it’s not uncommon for people to enter retirement with some level of debt, such as credit card, mortgage debt or car loans, this debt can have a significant impact on retirement plans and financial security as it can lead to increased stress and reduced income in retirement.
Alistair McQueen, head of savings and retirement at Aviva said: “Interest rates have risen to levels we haven’t seen since 2008 – and are expected to rise further. The cost of debt is now centre stage, and millions may be having to rethink their retirement plans.
“Starting to think and plan further ahead as early as possible is a small step that can make a big difference in the long-term. Individuals can take some positive actions to reduce their debt before entering retirement, such as consolidating their debt, paying off high-interest loans or switching to a cheaper rate, alongside reducing unnecessary expenses or taking out a debt management plan.
“Also, if appropriate, people could work with a financial adviser to create a full retirement plan that takes their debt into account and ensures that they have enough income to cover their expenses and enjoy their retirement years.”
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