Recognising how debt can creep up on you

It’s astonishingly easy to sleepwalk into debt. Understanding what its causes might be can help you to tackle it now, before it becomes a problem.
 

Lack of planning

It can be difficult to prioritise retirement savings. You might feel there are other, more immediate, expenses to focus on, meaning there simply isn’t enough money to build a proper retirement fund. This is likely to create a sharp drop in income once you reach retirement. It could also mean you create new debts or struggle with existing ones, such as your mortgage.
 

Poor pension management

The introduction of pension freedoms in 2015 made it possible to withdraw all of your pension fund when you reach the age of 55. While this isn’t always a bad thing to do it can lead to a shortfall later on. Now people are living longer than previous generations, retirement income needs to stretch further. Managing your retirement income properly is essential.

 
Unexpected events

Not everything can be planned for. Sometimes an unexpected life event means
 spending more than you budgeted for. This might include
• Divorce
• Household repairs
• Illness
• The death of a loved one
• Earlier than expected retirement

These can be stressful circumstances that could create a heavy financial burden. A lack of sufficient savings may mean debt becomes the only option.