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Pensioner problems lead to borrowing
01/02/2006 16:41:00
Newly-made pensioners are struggling to come to terms with life in retirement and are overspending money as a result.
Research carried out by Prudential shows that this happens to a quarter of pensioners in their first year of retirement, meaning they must resort to borrowing to compensate.
Some 48 per cent of overspending pensioners turn to credit cards to help themselves, while 17 per cent take out a personal loan.
Of those who overspent, half forked out between £1,000 and £5,000 too much while 15 per cent went overboard to the tune of £10,000.
Trevor Mitchell, Prudential UK head of retirement income, commented: "For the average person, when they hit retirement, their income drops overnight. So it's not surprising that many find it difficult to adjust their lifestyle, especially in the first year.
"The 'pensioner splurge' is a very real phenomenon. If a pensioner spends too much in the first year and does not have enough aside for the rest of their retirement, they could be left short later on."
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