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BankruptcyNews
Junior Member
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 Posted - 18 May 2007 : 10:25:41
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Pensioners grapple with unsecured debt mountain
Pensioners are carrying a huge debt mountain, with the average 60-plus-year-old owing more than 35,000 pounds in unsecured debts, a survey shows.
Some 63 percent of those aged 60 and over have unsecured debts -- such as credit card and loan debt -- according to a survey of 4,620 pensioners by equity release specialist Key Retirement Solutions.
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It found that the average pensioner owes 9,098 pounds in personal loans, 7,551 pounds in credit card debt, 3,215 pounds in overdrafts and a further 15,616 pounds in other unsecured debts, such as store cards and car finance schemes -- a total 35,480 pounds.
Taking account of outstanding mortgage debts carried into retirement adds a further 31,000 pounds per pensioner to the debt mountain, according to the research.
Recent figures from financial education charity Credit Action showed that the number of over-60s with money worries increased faster than among any other age group last year, as pensioners grapple with rising energy and council tax bills.
Dean Mirfin, a director of Key Retirement Solutions, said: "It is likely that some people have long term debts that they've failed to shrug off in to old age, but, for many, the allure of direct mail on their doorstep from lenders offering them 'easy' credit to help ease the rising cost of living, has certainly added fuel to the fire.
"We are seeing increasing numbers of over-60s not only taking mortgage debt into retirement, but servicing loans, credit cards and overdraft debt too.
"With official statistics showing that 11.7 million workers do not make any contribution to a private pension, and a growing culture and acceptance of debt in our society, this is a large scale problem that will continue to hit future generations in retirement."
The over-70s were found to have the largest unsecured debts, at an average of more than 40,000 pounds.
With monthly repayments on that of over 450 pounds and more than 38 percent of pensioners living on 10,000 pounds or less per year, it means that some older people are using almost half of their annual income to service their debt.
Chris Tapp, deputy director of Credit Action, said: "Retirement should be a time for some well-earned relaxation, but for all too many it is a time of financial stress.
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"Also, when we consider that inflation hits the over-60s hardest, pension provision is looking increasingly shaky, and we have moved away from a savings culture, we can see that the levels of debt amongst the over 60s, as well as being a serious issue now, is one which is only likely to get worse."
Source: uk.reuters.com
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Pensioners grapple with unsecured debt mountain
