Debt misery to prevent ‘comfortable retirement’?

Individuals may experience a debt-ridden retirement rather than the comfortable one they envisage, new research has suggested.

A study by Aviva has revealed many of the Baby boomer generation – today’s over 55s – plan to use their time off after their working life concludes to broaden their world experiences and enhance their social lives.

The survey found 43 per cent of retirees see the period as the beginning of a new lease of life, 23 per cent plan to travel the globe and 62 per cent hope to improve their fitness.

However, the investigation discovered over half of the people in this age bracket who earn £20,000 to £30,000 a year have saved less than £30,000 for when their employment terminates.

Clive Bolton, ‘at retirement’ director for the organisation, noted many will struggle to fund the lifestyle they desire.

Head of pensions and marketing at Friends Provident Martin Palmer recently noted the decision to scrap the default retirement age could pose a number of problems for Brits reaching the end of their careers.

A surveyof ClearDebt clients carried out last year showed people in retirement owed 234% of their annual incomes in debt, compared to 144% of annual income which was owed by people in employment.

By Joe Shervin