Alert as Yorkshire’s over-60s facing debt struggle

Many are failing to settle their debts before they die, prompting fears the scale of the problem could hit future generations with assets being sold to pay creditors rather than providing them with an inheritance. Loved ones may also find themselves having to settle other bills such as funeral costs.

Experts say the situation is worrying because many in the age group are about to retire, or if they are no longer working, rely on savings or their pension, making it difficult to raise extra cash.

Low interest rates during the credit crunch also mean many reliant upon savings have seen their retirement income come under increased pressure.

Figures from the debt charity the Consumer Credit Counselling Service for the first six months of this year show the average individual aged over 60 contacting it for advice owed £18,743 on credit cards and other unsecured debt. In Yorkshire, this age group has the highest average debt.

Last night a spokeswoman for the service said: “These levels are very worrying as nobody expects to be struggling with debt as they approach old age.

“Most people would hope to have paid off their debts by the time they are 60, but unfortunately this is a distant dream for a significant number of older people.

“It is much harder to deal with debt as you get older due to the limited options in increasing income and social care costs.”

Others have also raised concerns about the burdens which are being shouldered by older generations.

Both Age UK and National Debtline said figures showed more older people were contacting them for financial advice.

A spokesman for the helpline National Debtline said it had seen a rise in people over 65 calling for help with their debts.

“In the first six months of this year, 3,894 over the age of 65 called for help, representing 4.2 per cent of all callers,” he said.

He said the scale of debts could mean people cannot pay them off before they die.

Sometimes people had assets, such as houses, which would be sold off to meet their debts – a move that could affect the amount family members inherited.

However the problem was 
much worse if assets such as a home had been remortgaged, sometimes leaving families with no cash to meet funeral and other costs.

The spokesman said relatives would not be liable for the debt unless it was in joint names or someone had signed as a guarantor.

He said low interest rates could be contributing to the problem, adding: “A lot of people of that age are reliant on interest from savings and because interest rates have been so low over the last few years their incomes are certain to have dropped.”

Recent research for Age UK suggests the number of older people owing money has risen sharply over the last year.

One person in five aged 60 or over said they owed money on a mortgage, credit card or loan, with levels being significantly higher among the lower end of the age group.

More than one in 10 of those interviewed reported having to borrow money to pay their rent or mortgage.

The charity says the survey of more than 1,000 people highlighted the importance of its More Money in Your Pocket campaign which encourages older people to claim the benefits they are entitled to.

Michelle Mitchell, charity director general at Age UK, said: “It is extremely worrying that such a high number of older people report having debts and have had to borrow money just to keep a roof over their heads.”