Older people ‘should try to be debt-free before retiring’

Those looking towards retiring should try and clear their debts before leaving work, an industry expert has said.

According to Becky Wilks of the Money Advice Trust – a charity dedicated to providing free and independent monetary counsel – savings rates and investments have been affected by the recession and may have affected older people’s abilities to manage their debts as they had planned.

“It is important to try and pay off your debts because whatever you have paid into your pension now is not going to increase,” she said, adding that by continuing to work, getting a pay rise or a better job was a possibility.

Ms Wilks’s comments follow a report by Scottish Widows, which revealed that the debt burden for those retiring had increased over the last three years, with the average non-mortgage related debt rising from £5,930 in 2007 to £7,344 in 2009. The study also found that one in 14 retired people have dependent adult children.

By Sarah Adie