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A generation in debt - Britain's pensioners owe more than any other age group
A generation in debt - Britain's pensioners owe more than any other age group | the Daily Mail
By BECKY BARROW
Last updated at 01:01am on 22nd March 2008
Retirement is seen as a time to put your feet up and enjoy life's little luxuries.
The reality, according to a report, is more likely to involve working to pay off record debts and struggling to make ends meet.
For the first time, Britain's 11million pensioners owe more than any other age group.
Many are forced to rely on overdrafts, credit cards and handouts from family members to survive.
In extreme cases, they are having to use credit to pay for basic living expenses such as the weekly food shop.
The study by the Consumer Credit Counselling Service covered only "unsecured" loans, which means total debts could be larger because many pensioners still owe tens of thousands of pounds on their mortgage.
Those over 60 who had contacted the charity for help with their money problems owed an average of almost £30,000.
By comparison, the 18 to 24 age group owe £9,656; the 25 to 39s £21,876 and those aged 40 to 59 £28,903.
In the past, it was always the 40 to 59 age group who had bigger debts than any other age group.
The Consumer Credit Counselling Service said there were many reasons for the cultural change. One is that pensioners are more used to using credit cards than their parents were.
Rather than save up to buy something, many are happy to use credit to get something they cannot actually afford.
Sarah Nancollas, a director of the insolvency expert Nancollas Greer, said: "Judging from the
people we are finding approach us for help, it is the fact that pensioners are living on such low incomes that is driving them into debt. Many of them struggle and turn to borrowing and credit just to get by.
"Historically older people have been reluctant to get into debt but it seems many now feel they don't have a choice."
Another common reason is that older couples are squeezed by financial commitments to other members of their family. For many, their grown-up children are still a burden.
To get them on to the housing ladder at today's high prices, many are forced to give their children a deposit of at least £10,000.
With people living longer than ever before, many pensioners also have their own parents to look after. Soaring prices are likely to make the pensioner debt problem worse, according to experts.
The costs of essential items, such as bread, milk and fuel are rising at the fastest pace since records began.
The biggest losers during this climate of rising prices are the elderly, according to an analysis of official inflation figures by the investment group Alliance Trust.
For those over 75, the inflation rate is 3.4 per cent, which is 36 per cent higher than the official inflation figure of 2.5 per cent, it claims.
Rising costs such as food and energy hit the elderly the "hardest" because they spend a higher percentage of their income on these costs.
David Sinclair, head of policy for Help the Aged, said: "Pensioners are constantly facing above inflation price rises. Coupled with a fixed low income, many older people struggle financially more and more, year after year.
"With one in five pensioners living in poverty and an increasing number of older people in debt, the future looks anything but rosy for older people."
The charity will publish a report next week which is expected to reveal further evidence of debt problems among the elderly.
With huge debts, record numbers of pensioners are working beyond retirement age, according to the Office for National Statistics.
Nearly 1.3million women over 60 and men over 65 are working. Some want to work but many have no choice.
• Widow Rita Young, 71, says the cost of living has forced her into debt.
The former market researcher has reached the overdraft limit on her current account and has been struggling to pay off two credit cards.
She said: "I know the dangers of getting into the red but I've got no choice."
Mrs Young, of Peterborough, had barely finished paying off a £3,000 loan when she was forced to put money on credit cards.
She receives £140.51 state pension a week and a £200 winter fuel allowance. But she says this is not enough to keep up with the rising cost of energy and household bills.
She added: "I'm very grateful I don't like to smoke or drink or I would have been sunk by now. The only thing I allow myself is for a girl to come round and set my hair once a week.
"But I will have to stop this, too, if things continue to get worse."
A generation in debt - Britain's pensioners owe more than any other age group | the Daily Mail
By BECKY BARROW
Last updated at 01:01am on 22nd March 2008
Retirement is seen as a time to put your feet up and enjoy life's little luxuries.
The reality, according to a report, is more likely to involve working to pay off record debts and struggling to make ends meet.
For the first time, Britain's 11million pensioners owe more than any other age group.
Many are forced to rely on overdrafts, credit cards and handouts from family members to survive.
In extreme cases, they are having to use credit to pay for basic living expenses such as the weekly food shop.
The study by the Consumer Credit Counselling Service covered only "unsecured" loans, which means total debts could be larger because many pensioners still owe tens of thousands of pounds on their mortgage.
Those over 60 who had contacted the charity for help with their money problems owed an average of almost £30,000.
By comparison, the 18 to 24 age group owe £9,656; the 25 to 39s £21,876 and those aged 40 to 59 £28,903.
In the past, it was always the 40 to 59 age group who had bigger debts than any other age group.
The Consumer Credit Counselling Service said there were many reasons for the cultural change. One is that pensioners are more used to using credit cards than their parents were.
Rather than save up to buy something, many are happy to use credit to get something they cannot actually afford.
Sarah Nancollas, a director of the insolvency expert Nancollas Greer, said: "Judging from the
people we are finding approach us for help, it is the fact that pensioners are living on such low incomes that is driving them into debt. Many of them struggle and turn to borrowing and credit just to get by.
"Historically older people have been reluctant to get into debt but it seems many now feel they don't have a choice."
Another common reason is that older couples are squeezed by financial commitments to other members of their family. For many, their grown-up children are still a burden.
To get them on to the housing ladder at today's high prices, many are forced to give their children a deposit of at least £10,000.
With people living longer than ever before, many pensioners also have their own parents to look after. Soaring prices are likely to make the pensioner debt problem worse, according to experts.
The costs of essential items, such as bread, milk and fuel are rising at the fastest pace since records began.
The biggest losers during this climate of rising prices are the elderly, according to an analysis of official inflation figures by the investment group Alliance Trust.
For those over 75, the inflation rate is 3.4 per cent, which is 36 per cent higher than the official inflation figure of 2.5 per cent, it claims.
Rising costs such as food and energy hit the elderly the "hardest" because they spend a higher percentage of their income on these costs.
David Sinclair, head of policy for Help the Aged, said: "Pensioners are constantly facing above inflation price rises. Coupled with a fixed low income, many older people struggle financially more and more, year after year.
"With one in five pensioners living in poverty and an increasing number of older people in debt, the future looks anything but rosy for older people."
The charity will publish a report next week which is expected to reveal further evidence of debt problems among the elderly.
With huge debts, record numbers of pensioners are working beyond retirement age, according to the Office for National Statistics.
Nearly 1.3million women over 60 and men over 65 are working. Some want to work but many have no choice.
• Widow Rita Young, 71, says the cost of living has forced her into debt.
The former market researcher has reached the overdraft limit on her current account and has been struggling to pay off two credit cards.
She said: "I know the dangers of getting into the red but I've got no choice."
Mrs Young, of Peterborough, had barely finished paying off a £3,000 loan when she was forced to put money on credit cards.
She receives £140.51 state pension a week and a £200 winter fuel allowance. But she says this is not enough to keep up with the rising cost of energy and household bills.
She added: "I'm very grateful I don't like to smoke or drink or I would have been sunk by now. The only thing I allow myself is for a girl to come round and set my hair once a week.
"But I will have to stop this, too, if things continue to get worse."
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