Over-50s still working ‘to face debt problems’

An increase in interest rates could cause over-50s debt problems, newly-released research has found.

According to LV=, 40 per cent of people aged over 50 who are still in employment would have to reduce their pension contributions in order to cover debts if rates were hiked.

Some 44 per cent of these still have arrears on their mortgage, while 34 per cent of Britons who are between 60 and 69 still do not own their property.
A total of 54 per cent of those questioned said they intended to use their home as a means of financing their retirement, but 1.2 million workers believe their house price has fallen over the last three years.

It means any interest rate swell would not only negatively affect their savings, but it will also reduce their potential retirement funds. This double hit may leave many needing debt consolation help to escape their financial turmoil.

Vanessa Owen, LV= head of equity release, said: “It’s worrying that a rise in interest rates would force many people nearing retirement to reduce their savings.” She added property could end up being the only method many have of funding their post-work years.

If consumers do want to ensure they have a comfortable style of life once they stop working, they may want to consider getting individual voluntary arrangements to address the situation they find themselves in.

Should they decide to use this method, then their outstanding unsecured debts will be merged into a monthly reduced-rate outlay. The equity on a person’s dwelling will also not be affected in most cases, unlike other insolvency procedures.

The BBC recently published an article which focused on the debt problems faced by people over 50 in Wales.

Posted by James Francis