BORROWERS approaching the state retirement age owe four times more than their counterparts a decade ago, a study has revealed.
The survey, by Help the Aged and Barclays, found that a quarter of people approaching retirement age have outstanding consumer credit commitments.
The amounts that this group owe are not large but with a fixed income their ability to repay is limi
ted. Unlike any other group they are using credit cards to pay for essentials such as food and heating.
The report said the elderly face the "double whammy" of living on a fixed income while managing existing credit commitments.
David Sinclair, Help the Aged's head of policy, warned of a "ticking timebomb". He said: "This report shows that there are some worrying trends in credit usage that could represent a debt crisis for those coming up to retirement.
"We know from working with older people suffering from chronic debt problems that even owing a relatively small amount of money can cause untold misery for those living on a fixed income."
Credit users aged in their late 50s owed on average £3,000 in 2005 – at least four times the amount owed by their counterparts in 1995.
Beryl, a recently retired pensioner in Glasgow, has credit card debts of £3,000. She was struggling to repay it from her monthly income of £500 before developing a repayment plan.
This leaves her a surplus of £40 to repay her creditors. She will have paid her debts in five years.
Help the Aged has voiced concerns about the situation and said the government should introduce a strategy to tackle pensioner poverty.
Half of households headed by someone in their 50s are still repaying a mortgage. Outstanding mortgages increased "substantially" between 1995 and 2005. The fastest growth was among mortgagors in their 60s, for whom outstanding mortgages trebled in the ten years up to 2005 – from £10,000 to £30,000.
Arrears on credit commitments were most common among people in their 50s and 60s, and among those aged 70 or over, utility bills were the main area of financial difficulty.
The study was commissioned by the Personal Finance Research Centre at Bristol University. Alan Hands, of Barclays, said: "We recognise many older people are facing a range of financial difficulties and that dealing with money issues and debt can be very stressful."
The full article contains 396 words and appears in The Scotsman newspaper.
