More than one in five people retiring this year will still have debts when they stop work, owing an average of £38,200 according to new research from Prudential.

One in 20 will retire with outstanding debts of more than £50,000, rising to a staggering 1 in 10 among men over the age of 65.

The Class of 2011 study surveyed people intending to retire during the forthcoming year. The results show that 21 per cent will have to continue to pay down debts while reorganising their finances after finishing work. Another 14 per cent don’t know whether or not they will be debt-free when they retire.

The major sources of debt in retirement are credit cards and mortgages – 55 per cent of those retiring with debts in 2011 owe money on credit cards while 52 per cent still have outstanding amounts on their mortgage.

Men are more likely than women to carry debt into retirement – around 23 per cent of men say  they will still owe money compared with 18 per cent of women. And the average debt owed by men is substantially higher at £39,500 compared with £25,100 for women.

Vince Smith-Hughes of Prudential said:

“These figures show how the Class of 2011, a previously risk-averse generation of savers took advantage of the consumer credit boom of the last decade. Total consumer debt in the UK has more than doubled since 2000 and a large number of people planning to retire this year are now faced with spending a significant part of their retirement income meeting these debt repayments.”

The Class of 2011 research shows one in five (19 per cent) of those in debt have bank loans that will run past their intended retirement date while one in seven (14 per cent) have overdrafts. Just 1% of this year’s retirees owe money to loan sharks.

People retiring this year in Wales are most likely to have debts, with 37 per cent saying they will still owe money. Twenty five per cent of retirees in Scotland and 24 per cent in the West Midlands will have debts. Of those planning to retire this year with an outstanding personal debt, retirees in South West still owe £69,100 each, while the frugal new pensioners of the North East owe a more manageable £12,700 each.