The Retirees in Debt

Retirement is no longer the leisure time it once was, as the financial strain on British workers and retirees is deteriorating their circumstances. A representative of the Consumer Credit Counseling Service (CCCS), now known as the charity Stepchange, said that there are approximately 427,000 households of elderly people already having financial trouble.

As retirees get older, they still face debt, which they’re unable to pay off after covering living expenses. The Real Retirement Report done by Aviva says average unsecured debts for those over 55 years of age are up 31 percent from last year and 17 percent of people over 55 are still in mortgage debt.

There are reasons for these increases in debt at an older age. Divorce, helping children financially, and supporting elderly parents can all contribute to a person remaining in debt into their retirement. The recession also plays a part; while people may want to continue working the jobs just aren’t there. Additionally, costs of living are steadily increasing, which makes things harder for those approaching retirement who cannot increase their income.

However, many people take advantage of free debt counseling services offered by CCCS and Citizens Advice; they can give people the basics of budgeting and dealing with debt. They also look into a person’s eligibility for pension credit, tax benefits, and disability, as many of those eligible never claim these benefits.

For an older person that owns property, there’s always a possibility to downsize, but the cost of buying a new property needs to be addressed. Something else people can do is equity release, which is selling part of the value of your property at a discounted rate. It’s important to be prepared for the cost of these actions in the future, especially when it comes to family members who will have to deal with the outcome.