Retirees facing increasing debt mountain
Retirees facing increasing debt mountain
We can report that the average outstanding debt for those aged 55 and above and in retirement has risen by one fifth in the last year, to more than 65,000. This is an increase on the figures published in February 2010 indicating average debt was 54,500. The new figures suggest that 20% of the over 55's have some form of mortgage and 33% owe money on credit cards and unsecured debt.
The insurance provider Aviva has produced the figures in its latest Real Retirement Report which paints a bleak picture of retirees having little private provision in latter years and being reliant on the State and borrowing. It would appear that 2.5m UK pensioners according to research published by the Department for Works and Pensions in 2009 are living below the poverty line and Government action needs to be taken to address this.
The major concern within the report is the finding that over 75 year olds have an average credit card debt of 3,370. Aviva director Mike Bolton commented on the figures stating that "In an ideal world people would start the countdown to retirement without debt, but for many people this has not been possible due to the economic realities, poor financial decisions or family obligations.
Pensioners themselves have put the blame for their debt burden on the rising cost of living and it is clear that UK State Pensions are by far some of the lowest in Europe. The availability of longer term lower interest credit through mortgages is often not a realistic option for many given they face arbitrary age restrictions when it comes to access to mortgages for pensioners.
All lenders under the auspices of the Financial Services Authority (FSA) have a regulatory requirement to Treat Customers Fairly. Through its industry-wide consultation, the Mortgage Market Review, the FSA has given an indication intended for consultation that pensioners do fall into a high risk group requiring greater consumer protection and that lenders rightly should pay special attention when assessing their needs.
The issue may be one of proper financial planning into retirement rather than access to mortgages for pensioners. As a result of economic difficulties pensioners are having to work longer. The National Pensioner Convention has campaigned vigorously on this issue and has been at the forefront of campaigns for pensioners. According to Dot Gibson the General Secretary "It's no coincidence that more and more older people feel they have to keep working well into their retirement because Britain has one of the least adequate pensions in Europe.
It is such a backward step for a society to give the impression that the only way to survive older age is to keep working and the Government are reinforcing this idea by raising the retirement age.
"After a lifetime of work, people have earned the right to a decent period of retirement. Let's sort out the pension system rather than force people to work till they drop" she said.
Remove System Tool - Don't Purchase it! The Key Reasons Why We Purchase One Cup Coffee Systems Why Purchase A Mohawk For Your Helmet? Review the Reason of Purchase Silver A3100IS CANADA FX DEBT-C$ up at 3-year high despite retreating oil Personal Finance An instant Introduction To Three Funds Generating Instruments Consumer Debt is the Worst Kind of Debt Why iPad 2 Is Not Worth of Purchase Come Out of Debt Related Myths Why purchase clear polymer keyrings? Federal Grants Are Available For Clearing Off Debts How to Stop Collection Calls on Debt Owed by an Ex-Spouse Debt Settlement – It Is Not Easy To Settle Your Debt On Your Own