Nearly one in five will retire in debt this year

The average amount of debt for people retiring in 2012 is £38,200 with half owing money on credit cards and mortgages, the Prudential says

Almost 20% of people planning to retire this year will do so with outstanding debt, figures from Prudential reveal.

In its most recent study of the finances and expectations of those about to retire, Prudential found the bulk of debt owed was from outstanding mortgages and credit card bills.

While the proportion of people retiring in debt this year has fallen slightly from 20% in 2011 to 18% this year, the average amount owed has increased by more than £5,000 from last year's figure of £33,100 per person.

The survey showed on average, those planning to retire this year with debts will be making monthly repayments of £260 out of their expected £1,290 a month income.

Commenting on the findings, Prudential's retirement income expert Vince Smith-Hughes said, "With a manageable repayment programme in place, debts need not become an issue for this year's retirees."

"Retiring with outstanding debts could be a sign of a lack of financial planning. It is important therefore for those still at work to save as much as possible as early as possible, and to consult a financial adviser to help them plan for a comfortable retirement."