Retirement and debt now walk side by side

03/04/2008

People are reaching state retirement age struggling with debt - owing four times more than their counterparts a decade ago according to a survey by Help the Aged and Barclays. And clients over 60 have the highest levels of debt, averaging a surprising £29,642: hardly a rosy future for the UK's baby boomers.

 

David Sinclair, head of policy for Help the Aged, said: "Pensioners are constantly facing above inflation price rises, and coupled with a fixed low income, many older people struggle financially more and more, year after year. Financial worries can have a devastating effect on older people’s general health and wellbeing.  But worryingly today’s findings do not come as a shock."

 

People in their 50s and 60s using credit cards owed on average £3,000 and £2,000 respectively in 2005 - at least four times the amount owed by the same age group in 1995. Although the average amount of outstanding debt for those with any credit rose three times cross all ages between 1995 and 2005, by far the fastest growth was for those aged 55 to 59 and 60 to 64.

 

Help the Aged said the Government should introduce a strategy to continue progress in tackling pensioner poverty, and called for an overhaul of the Social Fund to meet the needs of the poorest pensioners. possibly the most worrying trend was the fact that, unlike borrowers in other age groups, older people are using credit cards to cover essentials such as fuel and food.

 

The increased use of credit cards and borrowing also means that many will be forced to delay retiring, and the fastest growth was among those with mortgages in their 60s. Arrears on credit commitments were most common among people in their 50s and 60s, and among those aged 70 or over, utility bills were the main area of financial difficulty.

 

The study was commissioned to support the work of 'Your Money Matters', run by Help the Aged in partnership with Barclays, which offers older people free money management and debt advice.