Three in 10 (28%), or 1.1 million, of older people in debt are considered to be in “problem debt” and are struggling to repay, according to new research published today by the International Longevity Centre – UK (ILC-UK) and Age UK.
The findings, using data covering 2002-2010, reveal that around six per cent of over 50s in England faced debt problems in 2010 whilst around a quarter of the older population were using unsecured credit.
And while the overall numbers of people with “problem debt” remained virtually unchanged between 2002 and 2010, among those with unsecured debt, 28 per cent were considered to be in problem debt in 2010 – a rise from 23 per cent in 2002. Among the over 50s population the older people are, the less likely they are to have debts; even so, of those aged 70 and over with unsecured debts, one in six are struggling with problem debt.
The latest figures also show that ten per cent of older people with unsecured debt – around 400,000 – are paying over £85 a week to service their debt.
It is widely acknowledged that debt problems seriously impact on people’s quality of life and relationships, but for the first time, this research shows that older people who enter problem debt are over twice as likely to experience marital breakdown as those who do not.
Significant levels of debt for people in or approaching retirement can cause particular hardship as the options to repay debt at this stage in life are often more limited or non-existent. The ILC-UK and Age UK are warning that the increased financial pressures older people have faced over the last decade, such as rising prices for energy, are likely to have contributed to the increasing amounts of debt owed among the over 50s. Generational effects also have had an impact, such as the fact those reaching retirement now are more used to credit cards and other forms of borrowing than older pensioners.
Published today, the new report, ‘Tales of the Tallyman: Debt and problem debt among older people’, highlights those most at risk from debt. The figures show that in 2010, self-employed older people were twice as likely as retired people to be in problem debt, with unemployed older people three times as likely – this is particularly worrying considering that growing numbers of older people are becoming self-employed, with those 50 plus making up 84 per cent of the increase in self-employed workers since 2008. Having a mortgage was also a key risk factor, with owner-occupiers with a mortgage five times more likely to be in problem debt as owner-occupiers without a mortgage.
The research shows that while the numbers of those aged 50 and over using credit dropped by 10 per cent between 2002 and 2010, the amount those with unsecured debt owe increased substantially, rising from £1,500 in 2002 to £2,500 in 2010 on average – an increase of two-thirds in cash terms. Among these debtors, 10 per cent had debts of £15,000 or more.
This research supports anecdotal evidence from Age UK advisors who report that they are seeing more cases of older people experiencing debt problems.
Commenting on the findings, Michelle Mitchell, Charity Director General of Age UK said: “There is a small group of older people who are facing the nightmare of increasingly serious debt problems which doubles their chance of their marriage breaking down and can ruin their quality of life.
“While it is good news that overall debt among the older population is falling, this research, supported by evidence from other charities, sends a clear warning that funding for debt and money advice for older people must be protected and expanded. Debt advisors need to understand the specific needs of older people often living on low fixed incomes and particular attention must be paid to those moving into self-employment or who have recently become unemployed.”
These findings follow a recent report by StepChange Debt Charity, which showed that although older people make up a small proportion of their client base, people aged 60 and over seeking their help had, on average, higher debts than any other age group.
However, it’s important to remember that older people still have more negative attitudes towards using credit and less likely to have debts than younger age groups.
Baroness Sally Greengross, Chief Executive of ILC-UK, emphasised that: “Without further intervention, problem debt will continue to blight the lives of older people – impacting on their relationships, quality of life and mental health. This is why it is so important that government makes a commitment to protect funding for debt advice services, and that these services are targeted towards those that need help the most.”
If you are an older person who is worried about debt or managing your money, Age UK can help. The free factsheets ‘Debt Advice No.75’ and ‘Managing Your Money’ provide basic information and are available at www.ageuk.org.uk or by calling our free Advice Line on 0845 65 65 65. The Advice Line also provides advice over-the-phone or can signpost you to a local organisation. Alternatively call your local Age UK to speak to an advisor.
Cost of playing Santa: Brits drowning in debt to pay for presents - 13 November 2013
House trap - 19 June 2013
Over 50s using property equity to pay of mortgage and debts - 10 June 2013
Dealing with debt in later life - 19 February 2013
One in 12 over 55s owe money through payday loans - 24 July 2012
Campaigns & Issues
Independent Age’s comments on the Autumn Statement
Independent Age Chief Executive, Janet Morrison said:
Increase in State Pension Age
"Independent Age accepts the logic for an increase in the State Pension Age, but for it to work we need measures to allow older people to work more flexibly as they approach retirement age, for example, to work part-time or in different roles.
"We also need to remember that, as now, not all individuals will be healthy enough to work until retirement age so we will need to look carefully about how we support people who do need to retire earlier.”
Raising state pension age is a betrayal of future generations
Britain’s biggest pensioners’ organisation, the National Pensioners Convention (NPC) has described today’s announcement by the Chancellor, George Osborne, to raise the state pension age as a “betrayal of future generations” based on inaccurate assumptions about life expectancy.
Dot Gibson, NPC general secretary said: "Contrary to the Chancellor’s claims, the Office for National Statistics has revealed that life expectancy is actually falling.
Competitions & Fun
Win a copy of NOW! That's What I Call Movies
Take a walk down Hollywood boulevard with NOW That’s What I Call Movies, the latest offering from NOW That’s What I Call Music. This triple-CD compilation is packed with renowned hits from the biggest blockbuster films of all time.
Featuring the iconic Bryan Adams’ ‘(Everything I Do) I Do It For You’, taken from Robin Hood: Prince of Thieves, through to the Whitney Houston’s smash hit ‘I Will Always Love You’ taken from the 1992 film Bodyguard.
NOW That’s What I Call Movies –they are all here, this is a big one.
Win one of 31 fabulous travel treats from Silver Travel Advisor this December
Enter now and you could win one of the 31 travel treats from our Christmas Stocking.
Silver Travel Advisor is a friendly website packed with advice, tips, information and honest reviews written by and for silver travellers (aged over 50). A team of advisors are on hand to answer queries (for free), and you can share your own experiences too.
Health & Wellbeing
Coffee may reduce the rise of prostate cancer
Recent research has demonstrated that there is a significant inverse relationship with coffee consumption and the development of nonaggressive, aggressive and fatal prostate cancer.
The study is of significance because Prostate Cancer is the most common cancer in men with over 40,000 new cases diagnosed every year.
Property & Finance
Autumn Statement overlooks chronic shortage of retirement housing in UK
Chancellor George Osborne’s Autumn Statement today was a missed opportunity to address some of the biggest housing problems in Britain.
Whilst there were a couple of housing announcements – namely that people living overseas will have to pay Capital Gains Tax for future gains on second homes bought in the UK from April 2015 and the pledge of £1bn of loans to ‘unblock’ large housing developments, other big issues were overlooked.
The Chancellor has demonstrated he is keenly aware that Britain has an ageing population - by raising the retirement age because of increased life expectancy, yet he continues to ignore the need for specialist retirement housing, currently in chronic short supply.
Leisure and Lifestyle
Having a dog is great – for your social life
Having a dog is good for your social life, adding an average of three friends to your social circle, according to new research.
The findings emerged from a detailed study carried out among 1500 dog owners, which discovered sharing casual greetings, anecdotes and tips on canine care on the daily walk opens new doors socially.
For one in twenty dog owners their pooches have led them to befriend more than 10 people they would not have met had it not been for their four legged friends.
Driving home for Christmas
Chris Rea’s song 'Driving Home for Christmas' is a one that resonates with many of us at this time of the year.
While it’s the time to spend with family and friends, many of us will be embarking on a car journey home before we enjoy the festive cheer.
But before you make that journey home, it’s important to do a few checks to the car.
What a brilliant paper! Well worth the money for the subscription or the bus to the local library!