1 in 4 people over 50 'in debt'
Published on 18 December 2013 12:30 PM
New research into older people's finances has found that 1 in 4 people over 50 have outstanding non-mortgage debts, owing an average of £4,500.
The Personal Finance Research Centre (PFRC) at the University of Bristol and the International Longevity Centre-UK (ILC-UK) said their figures show that there is 'persistent credit use in old age'.
Andrea Finney from the PFRC said that older people seem to face more financial pressures, and warned that the situation was likely to get worse if they carry 'unmanageable debt' into retirement.
Money and debt advice ‘more important than ever'
She added: 'With total unsecured lending rising steadily over recent months there's a growing need in an ageing society to understand why borrowing persists into older age and how individuals can be helped to prevent their debts escalating. The role of money and debt advice is more important than ever.'
The research found that one of the main problems is the situation of the 'squeezed middle age' - older people who have dependent children and also have to pay off a mortgage and other bills, while facing declining pensions.
David Sinclair from ILC-UK agreed that older workers who may have children to provide for are facing particularly huge pressures.
The Express quoted him as saying that this was especially the case 'when pay rises continue to be outstripped by inflation. Having high fixed household costs drives credit use, as does a low income'.
Increased financial pressures
The PFRC and the ILC-UK added that older people who owe money are likely to borrow even more, leading to a pattern of borrowing, with credit users set to become the biggest borrowers.
Age UK said most older people are not in debt, but those who are face an uphill battle as they must continue to pay off debts while spending money on other essential living costs.
Caroline Abrahams from Age UK said: 'Significant levels of debt for people in, or near, retirement can cause particular hardship as the options to repay debt at this stage in life are often more limited or non-existent.
'Increased financial pressures, such as rising energy prices, are likely to have contributed to the increasing amount of debt among the over-50s.'
Copyright Press Association 2013