Older New Zealanders are facing high debt pressure heading into retirement and are making up an increasing percentage of bankruptcies, research has revealed.

Data from credit rating business Credit Simple shows 27.8 per cent of bankruptcies are by people aged over 55 - up from 20.6 per cent in 2010.

The increase comes as the age group also faces high debt levels.

Of those with a mortgage 28 per cent are held by those 55 and over with the average debt level at $321,000.

Older Aucklanders were even more heavily in debt with the average mortgage for an over 55-year-old sitting at $393,229. That was compared to the average mortgage for an Aucklander under 55 of $536,776.

Older people who lived in Dunedin had the lowest debt levels with an average of $164,701.

Hazel Phillips, a Credit Simple spokeswoman, said she didn't know why more older people were going bankrupt and historic data was not conclusive enough to show mortgage debt was increasing.

"But if you look at what is happening in society, it is harder to own property and more expensive."

She said anecdotal evidence pointed to some people just putting big expenses like a holiday or renovations on their mortgage instead of saving up for it.

If people never paid down their mortgage they would simply get to retirement with a big debt, she said.

Phillips said the ideal position to be in heading into retirement was owning a mortgage free home with some savings in the bank.

She said some Aucklanders believed it was okay to have a big mortgage because their house was worth a lot of money.

That meant they could down-size and move out of Auckland on retirement to get rid of the debt.

But Phillips questioned the reality of that.

"Are people actually going to do that? It's a nice idea."

Some over 65 year olds are still carrying big mortgages.

According to Credit Simple 8 per cent of all mortgages are held by over 65-year-olds and the average owed was $232,000.

Phillips said many were also heading into their twilight years with more than just mortgage debt.

People over 65 were responsible for four per cent of personal loans and 16 per cent of credit card debt.

The average credit card limit peaks in the mid-60s for both men and women, rising from an average limit of $1756 for 18-year-olds to $11,135 for 65-year-olds.

Credit limits typically rise as people get older and establish credit history.

But Phillips said just because people had access to credit didn't mean they should use it.

She urged those with high interest debt to refinance it and use their credit rating to negotiate a better rate.

"With interest rates tipped to rise, it's more important than ever to use the power of your credit score to negotiate better interest deals," she said.

Source: NZHerald