Pensioners struggling to repay debts

The recent data from Key Retirement Solutions shows that the average retired individual in the UK who raises money by releasing equity in their property, is using the new loan to repay outstanding unsecured debts of £25,418.

However, this is just the average figures and there are cases where pensioners have to repay credit card debts of £250,000, whereas others have to repay mortgages of £300,000 and more.

According to the figures, the average annual income for retired individuals in the UK in 2010 constituted only £17,727 and the average repayment amount was £385 per month, which makes up about 26% of their income.

Due to shortfalls on endowment mortgages, a large number of retired people were left with uncleared home owner loan debts. Furthermore, many retirees have ended up with insufficient income as a result of the lack of pension planning or scarce investment returns.

In 2010 the independent equity release specialist dealt with over 4,000 pensioners who took out an equity release and discovered that a third of them had different types of debt.

In some cases, Key Retirement Solutions dealt with retirees who were paying about £2,000 on a home owner loan or credit cards per month.
 


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