Research by the firm, a corporate member of the Institute of Financial Planning, found 18 per cent of people planning to retire this year will have an average of £31,200 in debt.
More than a half of borrowers owed money on credit cards while 21 per cent had outstanding bank loans and 19 per cent had overdrafts.
Regionally, those in Wales and the West Midlands were most likely to retire with outstanding debts while retirees in Yorkshire and Humberside were least likely.
The average monthly repayment was £215 but 22 per cent of people were paying back over £400 each month.
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The majority of borrowers said they expected to be debt-free within four years but 12 per cent said they did not ever expect to be debt-free.
However, the figures were down from 2012 when the average amount owed was £38,200 and the average monthly repayment was £257.
Vince Smith-Hughes, retirement income expert at Prudential, said: "The fall in average debt owed by this year's retirees is a welcome sign that people are paying off some of the money they owe before they stop working.
"But when people's finances are still under pressure, with expected retirement incomes at a six-year low, it's important to ensure that debt repayments do not eat into retirement incomes too much or for too long. Paying off debt as early as possible-preferably while still working- will help to ensure that retirees have more disposable income."

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