The drop was driven mainly by men whose average debt plummeted from £45,300 in 2012 to £33,800 this year, while for women it fell from £29,400 to £28,100, according to research by Prudential

However, the source of debts has shifted. More than half owe money on credit cards, 56% up from 51%, while 21% have outstanding bank loans up from 18% and 19% have overdrafts, an increase from 13% last year.

Fewer of this year’s retirees with debts owe money on their mortgages, down to 43% from 50% last year.

The overall proportion of those retiring with debts has remained the same as in 2012, at 18% of retirees.

The drop in average debts is good news for the day-to-day finances of those retiring, with average monthly debt repayments falling to £215, from £257 in 2012. However, 22% of those retiring in debt in 2013 have monthly repayments of £400 or more.

On average, retirees with debts expect it will take just under four years to clear the money they owe. One third of people expect to pay off their debts in two years, while 12% do not expect to ever be debt-free.

Vince Smith-Hughes, Prudential’s retirement income expert, said: “The fall in average debt owed by this year’s retirees is a welcome sign that people are paying off some of the money they owe before they stop working.

“Debt does not have to be a major issue for people in retirement as long as they have sufficient income, and realistic and manageable repayment programmes in place. There is plenty of free help and advice available through the Money Advice Service and Citizens Advice Bureau for those with debt issues.

“But when people’s finances are still under pressure, with expected retirement incomes at a six-year low according to our study, it’s important to ensure debt repayments do not eat into retirement incomes too much or for too long. Paying off debt as early as possible – preferably while still working – will help to ensure that retirees have more disposal income, in turn enabling them to enjoy a more comfortable retirement.”