There are still many people entering into retirement with hefty credit card debt – in fact, one in five over-65’s owe money on their credit cards with average debt of £8,967, says Key Retirement Solutions.

Its analysis shows that pensioners making the monthly minimum repayment on a balance of £8,967 at an average 18.8% rate would pay £141 out of average gross pensioner incomes of £16,000. That equates to 10% of monthly income before tax – but someone only paying the minimum would take 30 years and one month to clear the debt without spending any more on the card.

But using some of your home’s equity could cancel out that debt and save you a fortune in your retirement. And there more than enough equity to do this – KRS says the over-65s have property wealth of around £765.2bn after paying off mortgages and gaining from increases in house prices.

Dean Mirfin, business development director at KRS, says: “Debt is a way of life for a substantial number of people and the over-65s are not immune. Many are perfectly comfortable with owing money on their credit cards and it can be a sensible way of planning for major purchases.

“Many of them do though have substantial wealth tied up in their homes which represents a potential source of income particularly when other sources of retirement income are under pressure from low interest rates and annuity rates.”

SOURCE: KRS, 16/03/10

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