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01 February 2006
New pensioners are working up huge credit bills in their first year of retirement, according to a survey from the Prudential.
A quarter of the 900 retirees interviewed said that they spent far too much during their first 12 months away from work, potentially harming their credit history.
Half said they had overspent by between £1,000 and £5,000, 15 per cent claimed to have lost more than £10,000 and two per cent blew £50,000.
To fund their spending binge just under half of the respondents relied on credit cards.
Seventeen per cent said they used a personal loan, while 20 per cent claimed to sell assets to prop up their financial status.
"For the average person, when they hit retirement, their income drops overnight," said Trevor Mitchell of Prudential UK.
"So it's not surprising that many find it difficult to adjust their lifestyle, especially in the first year."
A spokesperson for Age Concern told the Western Mail that the readjusting to a reduced income was "one aspect of retirement". However, he added that financial services needed to act responsibly when marketing products, and should advise customers of whether the service is right for their needs.
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