Debt problems may cause ‘fall in standard of living in retirement’

An increasing number of Britons could be set to face debt management difficulties in later life, new figures reveal.

A survey of independent financial advisers (IFA) conducted by Aegon indicated that 71 per cent of respondents believe that consumers are set for a "significant reduction" in their standard of living once they retire - as they struggle to meet utility bill costs and make repayments on personal loans and other forms of borrowing.

The rise in future debt problems was attributed to a ‘pensions savings gap’ as parents are forced to deal with extra financial pressures such as supporting their children for longer.

Graham Dumble, director of risk and regulation, said: "The results of this research show British people are heading for a sharp wake up call in their retirement planning.

"Unless they are prepared to accept a significant fall in their standard of living in retirement they will have to save more or work longer."

The study also indicated that 88 per cent of IFAs believe that a rising number of people will be unable to retire at the age they wish to due to financial pressures squeezing their abilities to making savings or personal loan repayments.

Last month, a study by Prudential revealed that more women could incur debt management problems in later life as 60 per cent of working age females are not making any contributions into pension schemes compared to 46 per cent of men.

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