More over - 60s in debt as they reach retirement

UK, March 20, 2007 - The baby-boomer generation is running in to debt as its members enter retirement, figures showed yesterday. The number of over-60s with money worries grew faster than any other age group last year.

Pensioners are being forced into debt because of the rising cost of living. Recent reports have shown that the personal inflation rate for those over 60 is nearer 10 per cent than the Government's reported average of three per cent.

This is due to increased council tax and heating costs which have left some pensioners unable to keep their homes warm.

The Office for National Statistics said food prices were up 4.9 per cent, electricity 27 per cent and gas 39.9 per cent.

All were heavy expenses for the average pensioner who, typically, did not spend money on items such as computer games and gadgets, which are cheaper.

A spokesman for Age Concern said that old people had traditionally been reluctant to get into debt, but that baby boomers, born just after the Second World War, were bucking the trend.

"Inadequate pension provision and changes in circumstances - such as retirement, illness, divorce and bereavement - can all contribute to debt problems in retirement," she said.

"People who have relied on credit cards while they are working may experience a large drop in income when they retire but still have outstanding balances on their accounts or continue to use their cards.

"We want the Government to introduce a higher basic state pension of at least £114 per week and would urge all older people who are struggling to check they receive benefits they are entitled to."

Those aged 40 to 59 have the highest levels of debt, last year owing an average of £32,886 while the average for the over 60s was £31,867. Nearly eight per cent of CCCS clients are now over 60, compared with 5.4 per cent last year. Recent research has warned that many adults approaching retirement are so accustomed to buying things with credit cards that they intend to continue when they retire, raising the spectre of further debt problems among pensioners in the future.

Back to News