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Thousands of State Pensioners Are
Struggling with Debt
Thousands of State Pensioners Are Struggling with Debt
Britain
October 25, 2005
Thousands of pensioners are running up debts as they struggle to make ends meet on the state pension, research showed yesterday.
One in 10 pensioners calling Age Concern, some in their 80s, is struggling to clear mortgages and pay bills such as council tax.
The charity is concerned at the increasing numbers of pensioners struggling to service their debts, including mortgages, loans and credit card borrowing.
Phil Veale, the financial services development manager at Age Concern, said: "Reasons for older people building up significant debts include the need for home improvements and a range of unsecured borrowings, such as credit cards and personal loans, which have built up over time. We have examples of people - by no means isolated cases - of 80-year-old home-owners who are struggling to clear their mortgages.
"Coping with mortgage repayments is not easy at the best of times, but for an octogenarian it can be financially disastrous."
The problem has been exacerbated by above inflation increases in council tax and fuel bills.
For example, British Gas has increased its prices three times in the past 20 months, the last rise being a whopping 14.2 per cent for both gas and electricity. The average council tax bill has more than doubled since 1997.
Pensioners were likely to continue to be plagued by debt, said Mr Veale, as they were often reluctant to leave the home they had lived in for years.
But in addition to rising bills, they faced the difficulty of maintaining that property on a pension.
Mr Veale said: "These people have been in their properties for 30 or 40 years and the house is going to get tired.
"It is then that people need money to sort out their situation.
"Increasing financial pressures, such as the cost of care for their parents, paying for the university education of their children or the consequences of redundancy, could leave many over-50s unable to save more and therefore expose them to debt in later life."
Mr Veale added that Age Concern was particularly worried that many people who could least afford it might be tempted to go to high-charging debt consolidation companies, rather than to explore "more appropriate options", such as releasing equity from their home.
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