Retirement and debt

In a nutshell

The rising cost of living and unexpected expenses are reported to be the biggest threats to quality of life amongst those approaching retirement ( Source: Aviva Real Retirement Report, winter 2016). It can be hard to manage debts and meet rising costs when on a fixed retirement income.

Delay retirement

Since the government phased out the default retirement age, you can carry on working for as long as you're lucky enough to stay healthy and employed.

And if you're working, you’re earning money that you can use to repay your debts. Plus, if you are able to keep paying into your pension plan you could have more money to put towards a retirement income - such as an annuity - later on.

But remember, you can't guarantee yourself more money by retiring later because pension investments can go down in value as well as up - you may get back less than has been invested. Also, annuity rates can worsen and you may not be able to buy the same level of income in the future as you could now.

If you're thinking about delaying retirement, we recommend you speak to a financial adviser. An adviser may charge you for their services.

Work part time

Taking a part-time job or reducing your hours can help you repay your debts before you retire fully. Or if you're not ready to give up work completely, working part time can give you extra cash to spend or save in retirement.

Can I still claim my pension if I carry on working?

State pension

If you're still working full or part time when you reach state pension age:

  • You can start claiming your state pension without stopping work
  • You no longer have to pay National Insurance contributions
  • You can choose to defer your state pension if you want to.

Find out more at

Work or personal pensions

You may be able to claim work or personal pensions while you’re still employed. Speak to your employer about any occupational pension you have with them, or contact your pension provider about taking benefits from a personal pension.

Release money from your home

Equity release could allow you to unlock cash from the value of your home to help fund your retirement.

The type of equity release we offer is a lifetime mortgage - it's a long-term loan secured on your home. You can carry on living in your home and there are no monthly repayments. Instead, the loan and interest are repaid, usually from the sale of your home, when you die or leave the property to go into long-term care, subject to our terms and conditions.

If you're thinking about equity release, you should always get financial advice.

And remember:

  • Interest builds up on the original loan and any interest previously added, so the amount you owe quickly increases.
  • You can choose to protect some of the value of your property, but a lifetime mortgage will always reduce the amount of inheritance you can leave.
  • A lifetime mortgage may affect your tax position and eligibility for welfare benefits.

This is a lifetime mortgage. To understand the features and risks ask for a personalised illustration.

Find out whether you're eligible for our lifetime mortgages.

Where can I go for retirement debt advice?

Visit the Step Change debt charity or the Citizens Advice Bureau for free debt guidance.

Or talk to a financial adviser about managing your money in retirement. If you don’t have an adviser, you can find one near you at

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There’s a lot to think about when planning your retirement. Take a look at our

Frequently Asked Questions.

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