Around 25% of retirees in UK have taken out credit cards to cover their overspending during the first five years of the retirement, according to a research conducted by retirement specialist Liverpool Victoria (LV=).
The research revealed that, among the pensioners six years or more into their retirement, 33% have taken out a credit card, while 10% have opted for a loan. About 9% are yet to pay off their mortgage.
Go deeper with GlobalData
According to the study, many new retirees are under-budgeting their first five years of retirement and are overspending by an average of £6,500.
The increase in spending is in part due to 32% retirees prioritising ‘having a good life and having as much fun as possible’ and believing that it is their right to spend after working for many years, the research said.
LV= Life and Pensions managing director, Richard Rowney, said retirement has changed; whilst previously retirees started to wind down once they left work, today’s retirees quite rightly want to make the most of the free time they suddenly have.
"The average retirement is now 17 years, much longer than past generations, meaning your lifestyle and associated costs are likely to change over this period. For this reason, it is important that they consider structuring their income in a way that allows them to adapt to their changing needs," Rowney noted.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
