Retirees ‘face debt time-bomb’

Many thousands of people aged over 55 in the UK are heading towards retirement with a significant debt management burden, new figures suggest.

The problems amounts to “debt time-bomb” and is primarily caused by a widespread inability among aging homeowners to clear their mortgage debts, according to Key Retirement Solutions.

Research by the financial services firm found that a third of all Britons aged 55 have mortgage debt outstanding and the average value of these arrears stands at over £37,000.

In fact, year on year, the average debt management burden of a UK consumer at the age 55 is rising at a rate of almost 20 per cent.

“These findings show that the financial difficulties of those entering, or already in, retirement show no sign of easing in 2008, if anything the picture is worsening,” said Chris Tapp from Credit Action.

Around 48 per cent of people in the UK feel apprehensive about their financial prospects in retirement, according to a recent study by MGM Advantage.