Apparently the Golden Years are not turning out the way that most people thought as two out of every five pensioners is estimated to be struggling with debt in the UK. Average debt amounts total to around £14,000, but the truly shocking part may be the fact that the people with the highest level of debt are in their seventies.
Key Retirement Solutions equity release firm released the research that simply shows that pensioners are finding their budgets squeezed with no source of new income. Therefore, they are looking for alternate ways to make the monthly bills.
Common debts are mortgages that the homeowners were unable to pay off before retirement and some interest only deals where pensioners are forced to look for lump sums quickly in order to pay off their capital. Other pensioners found themselves on the short end of an investment or an endowment where maturity values fell lower than the anticipated target leaving people with balances.
Making the situation even worse is the fact that the elderly are stuck with historically low pension incomes when you use the inflation ratio. Pair this against rising costs for the basics such as petrol, energy, and food and what you get is an equation where pensioners have very little left to spend.
It is estimated that about forty percent of all credit card debt among those who are over the age of 55 is held by those who are older than seventy. Out of this, the average balance is £9,000 on credit cards which works out to an average monthly payment of £263 which takes another chunk out of the pensioner’s income. Of course, this forces them to use their credit cards to pay for other items and the cycle repeats again every month.