Price of debt and recession takes its toll on an older generation

She and her husband saved for years for the deposit on their first modest house and the couple never owned a credit card, everything from family holidays to Christmas presents was always paid for up front. However, when her own daughter needed a deposit for a small flat, Sheila, who has now been widowed for five years, decided to take out a loan. When her son left university with 5,000 worth of debt, it was Sheila who again helped out.

Until recently, she was just about managing to keep her head above water, but six months ago she was made redundant. Unable to find another job, Sheila is now struggling to keep up with repayments and while she has put her house on the market, as yet there have been no offers. The amount owed is growing each month and Sheila is not alone.

While much has been written about increasing debt among younger generations, unwilling or unable to put money aside for the future, money trouble doesn't respect age or class.

According to the charity, Consumer Credit Counselling Service, the problem is growing among the over-55s who have been the hardest-hit by recent waves of redundancy. Many have spent the last few years bailing out their children and with pension schemes closing, retirement is no longer the cosy option it once was.

"Debt levels in the under-25 age group are now decreasing, but over the last year or so there has actually been a rise in the number of over-55s who are struggling to cope," says the CCCS' Tom Maloney. "We often find the older people who come to see us have been borrowing money to help out other members of their family. At the beginning, they can easily manage the repayments, but when they have found themselves out of work or trying to live on a pension worth a lot less than they thought it was, that's when the situation can begin to spiral.

"We have seen people who have started out borrowing a couple of thousand pounds a year. It perhaps doesn't sound like much to someone who has a full-time career and a lifetime to sort out their finances, but to those in their 60s and 70s, there isn't always the option to take on a second job to pay back the money they owe.

"Debt problems are very stressful at any age, but they are particularly hard to deal with at a time in your life when you expected to be more settled financially."

North Yorkshire has been identified as a particular hotspot by the charity, which is now trying to identify the reason behind the increase. What they do know is that the stigma of debt and the

prospect of being declared bankrupt forces many mature debtors to bury their heads in the sand.

"Very often they feel embarrassed and don't want other relatives to know the mess they have found themselves in," says Leeds-based Tom, who now heads the charity's new equity release service, which provides free advice to those worried about mounting debts. "There is a real fear of being declared bankrupt and having their neighbours know their business.

"It's daunting and frightening, but ignoring debts doesn't make them go away and we do try to encourage the people we see to tell their families. Bankruptcy is very much a last resort. More often than not a reasonable repayment plan can be sorted out and just by checking they

are receiving the right benefits we can increase an individual's monthly income by an average of 100.

"Being in debt that you can't pay back puts enormous pressure on individuals and their families. For many, the future still looks increasingly uncertain and for some it can feel like they have reached a dead end with no way.

"However, there is help available. Dealing with debt can be very lonely, but by talking to people trained in negotiating financial minefields there is a way out."