The average amount to pay off is £20,650, according to the report from equity release adviser Key.

People expecting to retire this year are facing debts around a fifth higher than those who finished work in 2020, although the number of those in debt has remained steady.

Nearly a third (32%) of those retiring in 2021 will be doing so in debt, with men expecting to retire with around 15% more debt (£21,885) than women (£19,068).

One in nine (11%) of those retiring this year do not know when they will be completely free of debt. 

While fewer retirees had credit card debt (to 40% from 48% in 2020) and mortgage borrowing remained stable at 31%. However, borrowing on all other methods increased. The number using their overdraft has increased (to 17% from 10% in 2020) as has the proportion relying on family and friends (to 10% from 8% in 2020). 

People hoping to retire in the North East are the most likely to retire in debt, according to the report, with nearly half (48%) retiring in the red.

The biggest average debts are in the East Midlands, at over £35,000.

Will Hale, CEO at Key said: “While it is good to see that we have not seen a sharp rise in the number of potential retirees finishing work with debt, it is concerning to see that the amount owed has increased by more than £3,000 in just twelve-months.  This seems to suggest that those who are already in debt are finding it harder than ever to repay their borrowing and expect to be three-years into retirement before they can finally wipe the slate clean.

“Unfortunately, trying to repay debt from a fixed income while still maintaining a good standard of living can be extremely difficult and people are likely to struggle to achieve this ambition.  Before their borrowing spirals out of control, they need to speak to a specialist later life adviser how will be able to help them make sustainable choices around how they manage what they owe.”

Research Plus interviewed over 2,000 people who intended to retire in 2020 (1,000 – 18 December to 31 December 2019) and 2021 (1,021 between 24 March and 08 April 2021) on behalf of Key.