There is perhaps a common misconception that people approaching retirement are usually financially secure. With mortgages almost paid off, no young children to take care of and a pension to look forward to, it’s easy to imagine they will have the funds to travel the world and indulge their favourite hobbies.
Of course, this is not the case for all those ‘baby boomers’ and pensioners who have racked up substantial debts. We might think that among the older generation, most only spend what they can afford – but according to the charity Age UK, more are now getting in touch to say they are unable to pay their mortgage, rent or energy bills. They may have taken out a credit card or loan but a change in circumstances, for example ill health, has meant they can no longer make the minimum repayments each month.
Now, figures from CreditFix, the country’s largest personal insolvency practice, reveal that, in a survey of 31,000 people undertaking an IVA between October and December last year, more than 10 per cent were aged 56 and over. This was, however, down on the previous quarter when the figure stood at 13.6 per cent.
During the same period, the number of younger people accessing financial help rose dramatically. Within the 26 to 35-year age group, the proportion jumped from 32 per cent to 35.7 per cent, while in the 36 to 45-year age group it increased from 26.9 per cent to 30.7 per cent.
Pearse Flynn, CEO of Creditfix, explains that, despite the recent drop, debt among older people should not be ignored:
“Looking at these statistics, it is easy to think that it is only the younger generation who are living with debt. Stories about 20-somethings living beyond their means and maxing out credit cards or those in their 30s who have to juggle paying the bills with treating their family are never far from the headlines, but it is worrying to think that so many older people are also struggling.
“Although the number of over-56s seeking help fell at the end of last year, it does not indicate that the problem has gone away. Sadly, there is still a stigma around asking for help – particularly for the older generation – so some householders could be suffering in silence.”
Reaching old age, and still having to pay off substantial debts, naturally leaves people feeling isolated and anxious, but Pearse says it’s important to start looking at ways to pay them off as soon as possible:
“The prospect of a visit from the bailiffs or court action is terrifying enough for anyone, but is even worse if you are elderly or vulnerable. Older people do not realise they may be eligible for benefits like winter fuel payments or bereavement allowances so it is worth checking with the Citizen’s Advice Bureau to see if you could increase your income.
“It might seem easier to ignore debts rather than face up to them, but this will do nothing to alleviate the problem in the long-term. A debt adviser can tell you about the repayment choices you have and offer impartial help. It’s also really helpful if you can confide in a trusted friend, relative or neighbour as they can provide much-needed emotional support.”
For more information on reducing debts, and the options available, visit www.creditfix.co.uk. You can also call 0808 253 3433 or text ‘advice’ to 60060.