UK Retirees could be losing large amounts of their monthly income because they are struggling to pay off debts.

This is the discovery of the new Class of 2012 study by Prudential, which found that the average person finishing work now has outstanding debts of £38,200.

Much of this is on mortgages and credit cards and will cost the average person £260 a month, or one-fifth of their income.

Most retirees believe it will take them four years to get back into the black, while eight per cent are worried that they will never be able to get out of debt.

Prudential's Vince Smith-Hughes said: "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."

Last month, Aviva found that 37 per cent of over-55s have yet to make any concrete plans to cover their spending in later life.

Source: My Finances