National free debt solution provider Payplan has warned that poor performance of final salary pension funds, cuts in pension tax relief and the prospect of frozen public sector pensions will increase the likelihood of debt for those facing retirement as well as those who have already retired.
Payplan says it has seen a significant rise in calls from people aged 55 and over in the last quarter with pension debt worries. The firm argues that intermediaries have a crucial role to play in warning people shortly facing retirement to take stock of their situation and seek advice to plan ahead to avoid the problem of debt in retirement.
John Fairhurst, managing director at Payplan, said: “The over 50s are our fastest growing age group and have the biggest debts according to our latest figures. This immediately throws up a red alert for us – high levels of personal debt coupled with a lower than expected retirement income is a potential recipe for long term hardship. It is vital that advisers encourage older clients to factor debt repayment into their retirement strategy.
