The proportion of people retiring in debt this year fell from 20% in 2011.
However the average amount owed has increased by more than £5,000 from last year’s figure to £33,100 per person retiring with debts.
Half of those with debts owe money on their mortgage and 51% were struggling with outstanding credit card debts.
Those planning to retire this year will make monthly repayments of £260, a fifth of the average monthly income of £1,290.
Paying off debt could take this year’s retirees an average of nearly four years and 8% of those who will still owe money when they retire in 2012 say that they will never be able to pay it off.
A quarter said they would be making repayments of £500 or more a month.
Men retiring in debt this year are likely to owe substantially more than women, with average debts of £45,300 compared with £29,400 for women.
A fifth of men expect to have debts when they retire compared with 16% of women.
Vince Smith-Hughes, retirement income expert at Prudential, said: “With a manageable repayment programme in place debts need not become an issue for this year’s retirees – and there is plenty of help available through the Money Advice Service and Citizens Advice Bureau.
“Retiring with outstanding debts could be a sign of a lack of financial planning. It is important therefore for those still at work to save as much as possible as early as possible and to consult a financial adviser to help them plan for a comfortable retirement.”
