Retirement a fading dream for many caught in the debt trap

Published on Friday 3 October 2008 22:01

MORE people could be forced to delay retirement in order to pay off their debts, new research has indicated.

Those aged between 50 and 60 owe an average of 41,400 in unsecured debts, 25 per cent higher than the average unsecured debts of other age groups, according to a survey of 40,000 consumers by debt solutions company Payplan.

The situation is worsened by the longer than average time it takes those "pre-retirees" between 50 and 60 to pay off those debts.

They have an average repayment term in a debt management plan of 11 years, said Payplan, compared with nine years for other age groups.

The research also found that pre-retirees spend 15 per cent of their total expenditure on energy bills, compared with 13 per cent across the other age groups.

John Fairhurst, managing director of Payplan, said: "Most people imagine that as they reach the countdown to finishing work, they will have paid off their mortgage and be busily saving for a comfortable retirement.

"These figures show that this is simply not the case for many pre-retirees and highlights a hugely concerning trend towards indebtedness in later life."