Average pensioner has £14,500 debt

And the average doesn’t tell the whole story – maximum credit card debts are as high as £95,000 with some pensioners paying off £100,000 unsecured loans and others struggling with £360,000 mortgages.

Key Retirement Solutions believes the ongoing restrictions on lending has driven pensioners to turn to credit cards to fund living costs when they’ve been unable to borrow in other ways and warns that the aftershock of the endowment mis-selling issue plus the growing interest-only mortgage squeeze are other major factors.

Its study of 4,210 customers found 18% of them are still paying mortgages while 17% still have credit card debt and 16% have outstanding personal loans. Around 3% have overdrafts on current accounts.

The debt burden takes a major bite out of pensioner household income –   pensioners with debts are putting £198 a month towards repayments. On an average pensioner household disposable income of £17,674 that amounts to 13% of income going on debt repayments. Those with mortgages however are hit hardest with payments averaging £331 per month.

But again averages do not tell the whole story – the highest monthly mortgage repayment was £2,200 while the highest credit card monthly payment was £3,000.

The average owed on a mortgage is £35,052 while average credit card debts were £9,913 and average outstanding loans were £10,511, Key Retirement’s data shows.

Dean Mirfin, Group Director at Key Retirement Solutions, said:

“Pensioners in line with the rest of the country have struggled to borrow money in the past four years and have increasingly turned to credit cards to tide them over.

“They are also feeling the effects of the endowment mis-selling scandal as they’re coming to the end of mortgage terms and struggling to pay off mortgages as their endowments have missed payout forecasts.

“It all adds up to a major squeeze on incomes but there is silver lining in that they literally sitting on considerable wealth in their own home. Clearing debt will transform their finances and provide a welcome boost.”