Some 40% will still have a mortgage or overdraft going into life after work, and a quarter (25%) expect to have credit card debt.

That was according to the research from more 2 life, an equity release lender, which said this was a rise from last year, when 31% expected to take debt with them into retirement.

Other findings were:

• More than half of 35-54 year olds (51%) expect to owe more than £10,000 upon entering retirement

• 1 in 6 over 55s (16%) has more than £4,000 on retail credit or hire purchase

• The mean borrowing on credit cards is £1,687, on unsecured personal loans £3,118 and on hire purchase £1,500

• Half (54%) of mortgagees will have more than £10,000 left to pay at retirement

• More than a quarter of those aged between 18-34 (26%) and 23% of those aged 35-54 expect to bring credit card debt into retirement

• Nearly three in ten (28%) of 18-34 year olds expect to have mortgage debt in retirement compared to 11% of the over 55s

Dave Harris, managing director at more 2 life, said whilst money is being drawn out under pension freedoms, “it is not being used to pay down existing debts to any great extent, but rather to replace new, short-term borrowing.”

He said: “These findings highlight the fact that many over 55s are taking out credit via loans or credit cards as they enter retirement, some with interest rates as high as 19% APR.”

He said: “Our research also shows that many people have begun dipping into their retirement pots to replace short-term credit facilities for spending. Many of these individuals will have an ace up their sleeve, however, which will be their property wealth. It’s therefore crucial that retirees are made aware of how they can access the funds, safely and easily.”