Kiwis heading into retirement ‘buckling’ under rising debt

A debt-free retirement is no longer an option for many New Zealanders, a new survey reveals

Kiwis heading into retirement ‘buckling’ under rising debt
Bankruptcy rates in over 55s on the rise as Kiwis head into retirement with mortgages, personal loans and credit card debt.  

Kiwis over 55 years of age are being weighed down by increasing debt, new data from CreditSimple.co.nz has found.

The figures show this age group is increasingly likely to experience bankruptcy, representing 27.8% of bankruptcies, up from 20.6% in 2010.

The data also showed 28% of mortgages are held by those aged 55 years and older, leaving them 10 years to pay off an average mortgage of $321,000 by age 65. 

For those over 65, 8% of mortgages are still held by this age group, with the average amount owed approximately $232,000. 

Looking at different regions, unsurprisingly Aucklanders 55 and older have the most mortgage debt, with the average mortgage sitting at $393,229, while over 55s with a mortgage in Dunedin have an average of $164,701 owing.  

Retirees and soon to be retirees are not only experience mortgage debt pressure. Those over 65 hold 4% of personal loans and 16% of credit card debt. 

CreditSimple.co.nz spokesperson Hazel Phillips said that Kiwis are hanging onto debt for longer and as a result paying more interest over their lifetimes. 

“The interest rates you pay on all debt, not just mortgages, play a significant role in how long it takes to pay off debt. With interest rates tipped to rise, it’s more important than ever to use the power of your credit score to negotiate better interest deals,” she said.   

The ten regions with the most mortgage debt included:
•    Auckland
•    Christchurch
•    Wellington
•    Hamilton
•    Manukau
•    North Shore
•    Waitakere
•    Lower Hutt
•    Dunedin
•    Tauranga