Nearly a third of over 55s expect to be in debt during retirement or are unsure whether they will have paid off all their financial commitments by then, according to equity release lender More 2 Life.

Around 60 per cent of those surveyed – 1,060 working adults aged 45 plus by Consumer Intelligence – had applied for some form of credit within the last two years.

This included 58 per cent of those aged 65 and above, with 18 per cent of those aged 65 and over saying they were refused credit on the basis of their age.

More 2 Life said that this underlined the growing need for increased flexibility from lenders, as well as a recognition that increasing longevity and rising house prices mean more people owe money on their mortgages past traditional retirement ages.

Demand to continue to borrow into retirement was also present, with nearly two-thirds of those questioned welcoming the ability to borrow in retirement, without necessarily wanting to use it.

Stuart Wilson, marketing director at More 2 Life, said: “Given the high levels of those who expect to be in debt at retirement, it is crucial that pensioners and those in the run-up to retirement focus on having sufficient income to support them once they retire.

“However that can be more easily said than done and the industry needs to focus on enabling people to borrow responsibly as well as open up the opportunity for those approaching retirement to make the most of the equity in their property.

He added that the concern about interest-only mortgages needs to be addressed. “In many cases those people are entirely able to service their debts but just need lenders to take a flexible approach.”