40% of retired interest-only borrowers to struggle with repayments

Its data shows that both unsecured and secured debt in retirement is increasing, with total debt rising from £70bn in 2016 to £85bn in 2018, and secured debt accounting for £73bn of this.

Credit card and loan debt is preventing more than one in five over-65s from enjoying retirement as they struggle to maintain their standard of living with one in seven (14%) relying on credit cards to boost their income in retirement.

Key says this high level of debt is not caused by over-spending, but due to a combination of inadequate saving, the launch of pension freedoms and unexpected bills.

55% of those surveyed say they had to pay unexpected bills on credit cards with car repairs the biggest issue followed by emergency house repairs.

Dean Mirfin, chief product ffficer at Key Retirement, said: “The issue of debt in retirement isn’t discussed as openly as it should be. However not only is it a problem, it’s a growing one.

“Pensioners worried about debt are not alone. We are all living longer and that means our savings have to last longer and we have to plan more carefully. Helping out family can also rapidly cut retirement funds while pension freedoms make it easier to access cash.”

Alvin Hall, independent financial expert, added: “A comfortable stress-free retirement is what we all want but debt is increasingly a silent source of worry for too many retirees.

“There’s a saying from my childhood I tell those who feel trapped by debt: We can’t change the past but we can change our future. Breaking through what’s created worry and understanding the problem is the only way to move forward.