Retirees becoming more reliant on credit cards and overdrafts
Retired homeowners are racking up a higher level of unsecured debt, new figures show.
Unsecured debt typically includes credit cars, personal loans and overdrafts.
The average amount owed per head jumped to £1,546 in December 2014 from £1,336 in December 2013, according to figures released today by the Equity Release Council (EQR).
December 2014’s level of unsecured debt marks a 16 per cent year-on-year increase.
The average amount owed on credit cards has risen to £594 from £498 – or 29 per cent. The average outstanding overdraft is up to £88 from £60 – a 47 per cent jump. And the amount owed in personal loans has grown to £662 from £609 – an increase of 12 per cent.
Meanwhile, the number of people with credit card debt has gone down with 19 per cent of retired homeowners owing money on a credit card in December, down from 23 per cent a year ago.
However, those who do have credit card debt have seen the amount they owe climb by 35 per cent from £1,914 to £2,580.
“These figures suggest that older generations are not finding it any easier to get to grips with the cost of living,” said Nigel Waterson, chairman of the EQR.
“Unsecured credit is clearly helping to manage the burden of monthly bills or extra expenses. This often proves to be little more than a short-term solution as people progress into retirement.”