PENSIONER DEBT REACHES £57bn

Over one million pensioners, or 1 in 5 retired homeowners, still have a mortgage, with an average outstanding debt of £38,000. This, coupled with 1 in 3 pensioners with personal debt of an average £5,900, has left many pensioners facing a bleak financial future. Read more…

A report from Scottish Widows paints a worrying picture.

The total debt of those over 65 has hit £57 billion, according to the investment company, while pensioners' average credit card and personal loan debt has risen by 42 per cent in the past year.

The data from Scottish Widows is the latest proof that the disparity in wealth between the UK's seven million pensioners has never been wider.

Many have retired with a comfortable company pension and no mortgage, but some are struggling to keep their heads above water.

Inflation has hit pensioners particularly hard, eating into their savings and landing them with escalating weekly bills.

Research shows that pensioners were hit by an inflation rate of nine per cent last year - more than double the official rate.

In recent months that figure has come down, but the average pension has failed to keep pace with rising living costs.

The report stated that "With more and more people taking out mortgages later, and paying them off later, we are seeing many people turning to the equity in their home as a method of providing income in retirement. The knock-on effect of getting on the housing ladder later is that money that could have been put into a pension is being used on monthly mortgage payments."

While the decade-long house price boom should have benefited homeowners now approaching retirement, many have been forced to use the value of their homes to help their children get on the property ladder.

For expert advice on bad debt management contact Carlo Pegna on 01992 890391 or e-mail carlo.pegna@mastercollections.co.uk.

To subscribe to our monthly emails, please click here.

© 2007 Master Collections Ltd