Everyone thinks it is just the young who are in debt and struggling, but new research has shown that the retired are having a tough time too. Here are some stats, and a checklist to improve your living standards and boost your income.
· Average retired person has £8,180 of personal debt
· 178,000 retired people have personal debts of £100,000 or more
New research from retirement income specialist MGM Advantage reveals that the average retired person has £8,180 of personal debt, collectively equating to a staggering £96.41billion. The average level of personal debt for a retired man is £9,007, compared to £7,350 for a retired woman.
Around 178,000 retired people each owe £100,000 or more, and just over 729,000 owe between £25,000 and £100,000. Only 57% of the retired population has no personal debt.
Amount of personal debt
Number of retired people
Between £1 and £5,000
2.486 million
Between £5,001 and £25,000
1.094 million
Between £25,001 and £100,000
729,000
Over £100,000
178,000
None
6.776 million
Don’t know
523,000
Aston Goodey, Director, MGM Advantage said: “These figures are alarming. As the cost of living continues to put pressure on household finances, many retired people will feel under growing pressure to take on debt to fund everyday living.
“There are things you can do to minimise the chances of funding your retirement through debt. It is vital that people shop around for the best annuity rate to maximise the income they receive. The difference between the best and worst rates can be as much as 50%2. People should also make sure they are claiming all of the State benefits to which they are entitled and also ensure that they have accounted for all old savings accounts and pension plans.”
On a regional basis, the average retired person in Wales has personal debt of £13,857, which is the highest in Britain. This is followed by £11,758 in the South West, and £11,255 in London.
Region
Average amount of personal debt per retired person
Wales
£13,857
South West
£11,758
London
£11,255
West Midlands
£9,417
Scotland
£8,890
North West
£8,094
South East
£7,390
Yorkshire and Humberside
£7,353
North East
£6,511
Eastern
£4,759
East Midlands
£4,164
Northern Ireland
*Sample size too small to report
MGM Advantage has published a checklist of things for people to consider when making important decisions at retirement:
1. Claim all state benefits to which you are entitled, to check, go to www.direct.gov.uk
Data suggests that pensioners are missing out on up to £5 billion a year in unclaimed pension credit, housing and council tax benefits, as well as attendance and disability living allowances.
2. Keep a track on any old personal or occupational pension arrangements, if you think you might have lost track of an old pension arrangement, you can check via the Department for Work and Pensions tracing service here http://www.thepensionservice.gov.uk/
3. You can check if you have any old savings accounts which you might have lost touch with over the years by going to http://www.unclaimedassets.co.uk/
4. Don’t just accept the annuity rate offered by your pension provider. You should shop around for the best rate and you might qualify for an enhanced rate for pre-existing medical conditions
5. Seek professional financial advice as this will help you get the best product and rate for your individual circumstances, to find an independent adviser go to http://www.unbiased.co.uk/
6. You may have old National Savings accounts or Premium Bonds, to check for unclaimed prizes please go to http://www.nsandi.com/files/asset/pdf/Tracing_brochure_v03.pdf
For further information please go to www.retirementnation.co.uk
