Debt worries thwarting traditional retirement plans

The poll of more than 2,000 UK pension savers suggests many savers expect to reach retirement age saddled with debt.   
 
The study also shows that consumers close to retirement continue to rack up new debts, with an average of £1108 of debt being taken on by the over-55s in the last three months.

The research comes amid rising consumer debt in the UK. The Office for Budget Responsibility estimates that households will spend £34bn more than they earn in 2016, with this figure soaring to £49.6bn by 2021.
 
The survey also shows that 42% of savers would use an unexpected windfall of £1,000 to pay off debts. Almost a fifth of respondents cited ‘paying off debt’ as their main goal for 2017.

True Potential Investor’s managing partner, David Harrison, said: “We have been tracking personal debt for four years and over that period, levels have been heading upwards, often driven by the perception of cheap debt and deferred repayments.
 
“Financial advisers will always recommend paying off debts as soon as possible to get rid of interest charges, so it’s encouraging to see people planning to do exactly that in 2017.
 
“But we still have paltry interest rates on cash savings. Inflation will creep upwards in 2017, eroding the value of cash savings, so we expect to see more and more people investing this year.”