The total amount of debt owed by the over-55s is predicted to rise to £294bn this year, up from £272bn in 2021 and £209bn in 2017.

This would amount to a 41% increase in just five years and is expected to rise to £402bn by 2032.

Further, it means a rise of 92% in 15 years, according to the joint research by the Centre for Economics and Business Research (CEBR) and More2Life

They revealed most of this debt is held by those aged between 55 and 64, who are still working while repaying mortgages and supporting children.

The total debt held by this group is expected to rise from £196bn in 2021 to £210bn in 2022. Half of 55 to 64-year-olds said they were currently in debt or have been in the past five years, equating to 4.4 million people.

Unsecured debt among the over-55s grew from £20bn in 2015 to over £25bn in 2019, but contracted slightly between 2020 and 2021 as a result of the pandemic.

The research predicted that unsecured debt is likely to rise again, by over a third in 2022 to reach £20bn, as the cost of living drives many to borrow to make ends meet.

Almost 40% of retirees said they have spent more than they receive in income in some months in 2022, with 8% saying this often or always happens.

Credit card debt

The average credit card debt stands at £2,800, while other types of unsecured debt levels are expected to average £10,700 per individual with debt.

More than one in five (22%) of over-55s revealed they had credit card debt in the past five years which they had not paid off in full each month, equating to 4.7 million people.

The second most common type of debt was an overdraft, with 9% saying they had used their bank account debt facility to fund additional spending.

Dave Harris, chief executive at More2Life, said debt was a fact of life for many people, adding: “However, with 40% of retirees already finding that their monthly outgoings outweigh their income, it is likely to quickly become a burden for some as the cost-of-living crisis continues.

“Over-55s are expected to borrow £22bn more than they did last year which is likely to be driven by higher interest rates and rising inflation. Servicing this borrowing will have an impact on those older people who are already on fixed incomes and may be providing some financial support for their families.”