Almost a third (30 per cent) of older homeowners are using equity release to repay unsecured debt while 20 per cent are using it to repay mortgages, analysis from Key revealed.

The equity release adviser highlighted that debt is a growing issue with customers aged 55 and over owing an average of £10,319 on credit cards and £13,578 on loans. The UK average for people with unsecured debts is £11,830, meaning the some over-55s could have more than double the average amount of unsecured debt.

Key identified mortgages as the most significant debt burden, with homeowners owing an average of £87,181. Although, further analysis suggested that the debt issue spreads across age groups as customers in their 70s owe an average of £9,773 on credit cards compared with £10,926 for homeowners in their 60s.

According to the data, those in their 80s also owe an average of £10,443 on credit cards.

Regular repayments have a significant impact on retirees, as customers are paying an average £300 a month on credit cards; £282 on loans and £586 in mortgage repayments. These sums take a substantial amount out of pensioners monthly income, with credit card needing to use an average of 40 per cent of the state pension, or £730 per month, on repayments before meeting other regular costs such as housing, utilities and general living expenses.

Commenting on the data, Key CEO Will Hale said: “Juggling debt at any age can be stressful but with typically a fixed income, older people are likely to find it even more stressful than most. Clearly people in their 70s and 80s are having to balance how to keep up these repayments alongside maintaining their standard of living in retirement.

“For homeowners, it makes sense to look at downsizing, equity release or other later life lending options to clear their debts and set them up for a more comfortable and less stressful retirement. Good independent expert advice is key to ensuring that older homeowners receive the most benefit from their property wealth and use it in the most appropriate way for them and their families.”

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