Over-50s face debt threat?

Those aged over 50 may soon find that they are faced with the possibility of debt, as a result of the VAT increase that will come into effect on January 1st.

According to Rias, this climb will see the demographic provide an extra £524 million and managing director of the company Janet Connor observed that, over 12 months, the rise of 2.5 per cent “really does add up”.

This, she said, “bolsters the already substantial contribution the over-50s make to the UK public purse”, an opinion supported by Rias research.

The firm found that this age group are big consumers, outspending younger people by nearly 13 per cent every week.

In 2010, older generations will, Rias has suggested, be outlaying £19 in VAT a week, compared to £18.52 in 2008.

It also recently emerged that people wishing to save may struggle in 2010.

Ed Bowsher of lovemoney.com observed that the likelihood of the base rate staying at 0.5 per cent for some time could mean putting money away is difficult.

By Sarah Adie