A study carried out by Key Retirement Solutions has shown that the average retired British citizen taking out an equity release policy to release some some cash has debts of £35,991.

According to the calculations, the average monthly loan repayment of a pensioner in the UK is about £297 a month, which makes up almost 30 per cent of the average annual post-tax income of pensioners.

The retirees over 70 year old have even more debt than their sixty-something fellows, with an average £40,958 unsettled.

It appears that mortgages constitute the largest part of the debt with 27 per cent of retirees still having mortgage debts. In all probability, this can be explained by the fact that a growing number of retired people in the UK are living with a mortgage into retirement following some investment shortfall.

According to the projections, this situation will be aggravated since many endowments are due to mature with significant shortages in the nearest future.

Dean Mirfin, KRS group director, commented that property wealth gave the over-65’s the opportunity to afford taking out loans.

Coping with the debt is virtually impossible when you no longer have an income to comfortably repay debts. As a great number of retirees in the UK are desperately trying to clear loans, credit cards, overdrafts and mortgages, many of them are sitting on great wealth in the form of their property and liquidating debt can be critical to their monthly outgoings, providing a desirable increase to their income.

It is not a good sign than the mortgage debt level continues to be carried into retirement. Since no positive changes are expected in the future pensioners in the UK will have to apply for equity release to ensure the comfortable retirement.


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