Pensioners use savings to pay debt

A new survey has shown that 24% of retired people are using part of their pension lump sum to repay debt, while a further 17% use it to pay off their mortgage.

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However, the research for Scottish Widows found that others are using the tax-free lump sum they received when they stopped working to enjoy life during retirement. Some 45% said they were travelling more, while 30% are carrying out more home improvements.

The YouGov poll of more than 6,000 people revealed that 10% of retired people had taken up an evening class and 46% said they were spending more time in the garden.

However, today's workers do not have quite such golden years to look forward to, Scottish Widows warned, with 49% of people who have yet to retire failing to save enough into a pension.

Ian Naismith, head of pensions market development, said: "It is encouraging to see that so many people are enjoying themselves after they retire, but it is vital that people who are still working realise the difference between wanting a good retirement and actually planning for one."

Copyright © PA Business 2008

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