A new study has revealed that the average level of personal debt for a woman retiring now stands at £7,350, while retired men face £8,180 of personal debt on average.

Retirement income specialist MGM Advantage has published the debt situation that British people retiring these days are suffering.

Overall figures revealed that retired Brits in the UK face up to £96.41 billion of personal debt. Specifically, data shows that 2.5 million British people retiree with a personal debt between £1 and £5,000, while 1.094 million face a debt standing between £5,001 and £25,000. However, the great majority of British retirees (6.7 million) start their retirement with no debts to pay off.

Further data shows that Wales, the South West of England and London are the British regions where retired people face a higher amount of personal debt, with this standing at £13,857, £11,758 and £11,255 respectively. Brits with the lowest amount of debt live in the North East (£6,511), Eastern (£4,759) and East Midlands (£4,164).

This news makes clear how vulnerable the financial status of British people retiring these days is. Many fail to plan effectively for elderly support. On top of debt, today’s retirees will have to face a higher tax rate from next April 2013. This is the date when the government will officially remove the current tax allowance that British retirees aged over 65 enjoy of right now.

Alarming figures

“These figures are alarming. As the cost of living continues to put pressure on household finances, many retired people will feel under growing pressure to take on debt to fund everyday living,” said Aston Goodey, Director at MGM Advantage.

He also gave some advice to people looking to put their debt under control: “It is vital that people shop around for the best annuity rate to maximize the income they receive. The difference between the best and worst rates can be as much as 50%.” 50% is a lot of money to potentially lose, isn’t it? It could be the difference between being able to afford a stairlift for the elderly and not in the years to come.