People of all age groups can have money issues.
That said, those with debt problems are typically seen as younger individuals who are still hampered by student loans; have just purchased a house for the first time; or are bringing up a number of offspring.
Yet, new research from charity StepChange has revealed that it is in fact pensioners who are the most indebted age group in the UK, with the over-60s racking up a total of almost £250 million worth of debt.
The scale of pensioner consumer debt may surprise many people. The average debt of a person over the age of 60 who contacted the charity was £23,000 last year. This is a figure which is £5,000 more than that of any other age group in the UK.
The research analysed where these debts were being accrued and found that the elderly are becoming more reliant on their plastic than they have in the past, as pensioners had built up the majority of their debts on credit cards. The average credit card balance of those over-60s who spoke to the charity was £15,150, which compares far less favourably with the average across all age groups – £10,000.
Despite this one huge discrepancy, it is not just credit cards that are causing debt issues for the UK’s pensioners, as they also owed an average of £2,000 in catalogue debt, plus many are having problems with their bank account overdrafts and their store card balances.
In fact, the only form of credit in which the elderly consumers were found not to have borrowed more than their younger counterparts was payday loans. On average, pensioners took £1,220 daily from payday lenders over the course of last year, which is around 25 per cent less than the average seen across all of the people who took part in the StepChange research. However, it may only be a matter of time before payday loans become more common among the elderly, as the charity did state that this type of debt was growing in the over-60 age group because their average payday loan debt increased by £100 in 2012 compared to year before.
Not surprisingly, this has also led to an increase in the number of elderly people looking for help with their arrears. Last year, 13,148 pensioners got in touch with the charity about their debts. This is a huge 36 per cent increase in just three years as in 2009, 9,628 pensioners contacted StepChange for help.
Debt Legal’s Jonathan Matthews has been helping people get out of debt for more than a decade and knows that money problems can occur however old a person is.
He said: “While it is concerning that pensioners are stuck with high debts at the end of their working life, it is also encouraging that they are seeking ways to cut these debts and enjoy the rest of their retirement.”
People should know that debt help is always on offer, it doesn’t matter how old a person is, Mr Matthews concluded.
About Jonathan Matthews