Scots over 60 have biggest debts - Scotland

Scots Over 60 Have Biggest Debts

Older callers to debt helpline owe average of £43,760

Indebted sixty-somethings calling the helpline of personal debt solutions company newtomorrow.com have the highest unsecured debt of all callers.

The average 61-65 year-old calling newtomorrow.com for debt advice has £43,760 of unsecured debt, compared to the average caller who is 41 years old and owes £30,334. The 66-plus group has an average debt of £35,789.

This is bad news considering pensioners aged 66 and over have the second-lowest average monthly income at £1,385 and spend £1,009 of that. However, at £376 a month, they don’t have the lowest disposable income – 18-25-year-olds take that dubious honour with £285 a month.

The figures from newtomorrow.com contrast with the common assumption that most retired people enjoy a higher standard of living, and reveal that many older people are still struggling with money well beyond retirement age.

Ian Wright, managing director of newtomorrow.com, said: “It is worrying that older people who are calling us for advice have the highest debts. These figures paint a bleak picture of people who are still saddled with debt at a stage in their life when they would have hoped to be free from money worries.

“Many of the people who are calling us do not own their own home and have  struggled to repay  costs incurred on the likes of their children’s wedding or have supported their family in a time of financial crisis. 

When their house is owned, we often find that our older clients have focussed on repaying their mortgage, thinking that will leave something for their family, but this has often been achieved by accruing additional unsecured debt.  Re-mortgaging is unlikely to be an option past 65, but there are other products available that can release equity allowing the unsecured debt to be repaid and avoiding the need to sell the house.

“With a low disposable income it will also take longer to clear debts, perhaps forcing people to work longer into their old age in order to avoid bankruptcy.

 “At the other end of the spectrum, young people are also struggling financially and have the lowest disposable income of any age group – bad news when they are struggling to get onto the housing ladder – which creates a situation where they are more likely to use credit to make purchases in a world driven by consumerism.

“However, debt can be tackled without the need for bankruptcy if prompt action is taken, through better budgeting, debt management plans, or more formal agreements with creditors.”

Newtomorrow.com’s statistics also revealed:

• The highest number of debtors calling newtomorrow.com fall into the 41-45 age group.
• The 66+ group has the greatest level of equity in their assets. The average value, predominately their house, was £124,000 per debtor.
• The average debt of the 66+ group was £35,789 which means they could release capital tied up in their house and leave them with £88,211 of equity.

For advice on debt worries, contact newtomorrow.com on 0800 6781234.