The amount of credit card debt held by the over-55s continues to rise, with an increase of 9 per cent over the last year to an average of ?1,052.
The latest Real Retirement Report from insurer Aviva has found that ‘both secured and unsecured debts are weighing down on over-55s’, with the level of credit card debt reaching the highest point since the insurer began collecting data in 2011.
Those over-55s still working are particularly hit, owing 76 per cent more on credit cards than their retired counterparts, with the figures standing at ?1,296 and ?737 respectively.
However, it is not just credit card debt that is causing concern for the over-55s.
Overdraft debt, though relatively small at ?91, has seen an increase of 17 per cent over the last year from ?78 at the same point in 2016.
Personal loans are also growing, particularly for those over-55s still working who owe an average of ?2,490 compared to those who have already retired owing ?1,314.
The scenario is similar with mortgages. Around 31 per cent of over-55s still working also still have a mortgage, compared to only 8 per cent of those already retired.
The average mortgage debt of over-55s now stands at ?68,612, an increase of 14 per cent on the same time a year ago, with analysis suggesting that this is due to an increase in interest-only mortgages being brought into retirement.
Finally, the cost of living can also cause concern for this age group. 55 per cent of the over-55s stated that the cost of living is one of their most significant concerns that could threaten their standard of living. This figure is up from 45 per cent last year.
Lindsey Rix, managing director of Savings and Retirement at Aviva, commented: ‘A growing number of Britons are prolonging their working lives and our findings suggest that the goal of a debt-free retirement may be one factor behind this.
‘The approach to retirement is ideally a time for saving and careful financial planning, but with the rising cost of living, many people are having to resort to borrowing and still have mortgage repayments to factor into their budgets.’
She continued: ‘With widespread speculation that interest rates may rise for the first time in over a decade, this record level of debt is worrying. An increase in the cost of borrowing will undoubtedly create challenging conditions for people to navigate on the approach to retirement.’