A happy retirement – or towering debts and depression?

While much attention has been focused on the financial difficulties facing families with low incomes facing steeply rising bills, there has been a steady and growing chorus of alarm about the future finances of the over-50s.

Last year our research showed that shown that the 65+ age group had seen the fastest rate of change in bankruptcy over the last decade.  The second fastest rate of change was in the 55-64 age group; so serious and worrying implications for those in and those approaching retirement.

 Now research published by the University of Bristol’s Personal Finance Research Centre says that older people who get into financial difficulties are eight times more likely to report being mentally unwell or depressed than those who live comfortably.

Last year bankruptcies among over-65s rose by 470 per cent to 1,972.  And the amount of debt older people are carrying also rose; an over-55 borrower had 36 per cent more unsecured debt than in 2011.

Chief Executive David Rodger said: “We have seen a significant increasein the numbers of older people calling for advice, many of whom found themselves in desperate straits with no prospect of additional income but steadily rising bills.  

“Whilst the 35-44 age group continues to have the highest number of bankruptcies in absolute terms, the fact that the rate of change is so markedly higher for older people – and has sustained that position as bankruptcy numbers overall have fallen dramatically – demonstrates that this is a trend that seems set to stay.

“We are hearing increasingly from older people who are working well beyond their expected retirement age in an attempt to pay off debts – and often they are doing little more than meeting the interest element of what they owe.”

He went on: "The generation that is approaching and entering retirement now is really the first that has had consistent access to credit through their lives.  Many are not planning for their fall in income in terms of servicing their debts.

 “Very often the tipping point into unmanageable debt is something catastrophic – redundancy, divorce or long term illness for example. These are facts of life for increasing numbers of older people, who then have no prospect of ever having sufficient income to pay off their debts.

“Rising fuel and food bills, stagnant house prices, falling pension income and minimal returns on savings are all conspiring to make retirement anything but a happy prospect for many older people today.”

 

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