A new studies has revealed that pensioners have been one of the hardest hit by the financial downturn, as one in three people over 65 head into retirement with average debts of £25,000.
This age group have also seen their household finances hit by lower than expected returns on pensions and investments (as the interest rate remains at a historically low level), plus above average hikes in living costs.
Worryingly, this has meant that more pensioners have been forced to fund their retirement by running up credit card debts to pay their way, juggling unsecured loans, overdrafts and other unsecured debts to cover everyday bills.
The research, conducted by Key Retirement Solutions, showed that while the average debt for a portion of the over 65s may be £25,ooo, some people owe much more and are facing a retirement littered with debt problems.
Some of the biggest amounts owed in the study showed pensioners with £90,000 of credit card debts, £250,000 worth of unsecured loans and others owing £340,000 on their mortgage.
Dean Mirfin, from Key Retirement Solutions, said: “Pensioners, in line with the rest of the country, have struggled to borrow money in the past three years and increasingly turned to credit cards for help.
“They are also feeling the effects of endowment mis-selling and struggling to pay off mortgages as payouts have missed their targets.”
However it isn’t just the current over 65’s that face a future of debt management problems. A whole generation of people that are burying their heads in the sand and refusing to plan for the future have been identified and dubbed the “ostrich” generation.
David Wells from HSBC says: “This ostrichgeneration is a real concern. Brits know they need to plan and save more for their retirement, yet are not turning this knowledge into action.
“People need to look around and take proper stock of what they need to do – they can no longer totally rely on the state or their employer to provide for them.
“In the 21st century, it is about taking individual responsibility.”
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