According to a recent survey by equity release lender More2life, credit card debt for the over 55s has risen by 20 per cent in the last 12 months.
More over 55s in debt than 5 years ago.
The proportion of over-55s who have been in debt in the past five years has
increased from 37 per cent in 2018 to 54 per cent in 2019.
Most over 55s, more than half, having borrowed using credit cards.
Almost a third reporting borrowing to cover essentials and day to day spending.
The research found that after mortgages, credit cards are the main choice for borrowing for the over-55s, with a fifth (22 per cent) of over-55s in the UK turning to credit cards to help fund their lives.
Over 55s also holding other debts.
Although credit cards seem to be the main choice of borrowing for this
group, other common forms of lending include car finance, about 9 per cent. Personal
loans are around 7 per cent and overdrafts also 7 per cent. Interestingly,
over-55s were more likely to be holding student loan debt after choosing to
return to university than debt from a payday loan.
More2Life also found that the proportion of over-55s who have left their
bills unpaid has doubled in the past 12 months from 8 per cent in 2018 to 16
per cent in 2019.
The lender described this as a “cause for concern.”
Concerns over using credit cards to cover daily essentials.
Also causing concern is the disclosure that 29 per cent of this age
group admit that covering day-to-day expenses is the main reason they have
A further 26 per cent said they have used credit cards to help pay for other outstanding debt. As many as one in five said they have borrowed to help pay their mortgage debts. 24 per cent, a quarter of those surveyed, have held debt to pay for a large purchase, such as a holiday or car.
Dave Harris, CEO at more2life, said:
“As older generations enter retirement with lower pension pots but arguably more financial responsibilities than their predecessors, it is perhaps unsurprising to see that many are turning towards borrowing to help fund their later lives. Whilst credit cards have become a normal part of many people’s financial management and some will be comfortable servicing this debt, this is not true for everyone. “If you are unable to pay your bills and borrowing on credit to keep afloat then it is vital that you consider all your financial options as it is only likely to get worse. Currently, around one in five of our customers use equity release to repay debt, so we know that these products and other later life lending options can help people facing these types of issues.”
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