UK Pensioners In Credit Card Debt

With fewer jobs around, the recession has left many Britons struggling for cash as the cost of living soars.

However, as gas, electricity, water and food prices increases, could it be that pensioners have been the worst hit by the crunch?

As the UK falls deeper into recession, pensioners are falling even deeper into debt as more of them turn to credit cards as a bid to get by.  According to figures from Key Retirement Solutions (KRS), today's pensioners have a debt of more than £183 billion.

The research from the firm found that one in five pensioners have outstanding credit card debts with the average totalling up to be a shocking £8,892 per person.

Savings are Falling

An increasing number of UK pensioners are seeing their saving's diminish as a result of the ongoing reductions in the Bank of England's base rates. Along with the drop of their pension values, more pensioners are facing increased debts as they begin to use their credit cards to purchase everyday essentials such as food and fuel, which have both increased significantly over the past year.

KRS found that those aged between 65 and 69 have an average credit card balance of £9,086 while those over 70 remains at £8,760.

Chris Tapp, director of the charity, Credit Action warned of the increasing numbers of pensioners turning to credit cards as a means of getting by.

He said: "Debt is a worry for people of all ages in the recession, but it is particularly troubling for us to see a marked increase in the problems older people face.

Last year, levels of debt among over-60s rose more than for any other age group."

He stated that "As the crunch has hit, the value of pensions, property and investment and savings income has plummeted.

Tens of thousands who should be enjoying their retirement are instead stressing about their finances - and this 'grey debt' is an area of particularly grave concern."

Pensioners seek debt advice

According to the Citizens Advice Bureau, there has been an increase in the number of older Brits seeking debt advice.

The firm stated that five per cent of its new daily debt cases are from those over 65, while 10 per cent are from those between 55 and 64 years.

KRS also revealed that pensioners have a total of over £140 billion in mortgage debts with one in three having an average debt of £43,000 each, when going into retirement.

KRS group director, Dean Mirfin said: "Many look at retirement as a period when we should be free of any debt worries and enjoying our retirement incomes to the full. Of great concern is the fact that the 70 and over age group carry the bulk of the debt showing that the problem is evident well into retirement. Over 66 per cent of the total debt is held by those aged 70 and over."

"The future is looking gloomy for many who will spend their retirement repaying debt," he added.

Moira Haynes, of Citizens Advice, said: "Inevitably, income will drop for most people during retirement and they need to take that into account and do some proper financial planning.

"Anyone struggling with debt should not ignore it. It won't go away. If they really can't cope, they should see a debt adviser who can help them come up with an affordable repayment plan."

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