Two-fifths of pensioners have debt worries

Two-fifths of pensioners are struggling to keep up with their debt repayments.

Research by Key Retirement Solutions has shown the scale of the problem, as the amount typically owed by people over the age of 65 has risen to £14,500. Worryingly, those with the biggest debts are in their 70s.

As the majority of these individuals will no longer be employed, they are going to struggle to service their debts in the long term and so immediate action is required.

The typical balance on credit cards for over-55s was found to be £9,913, which means they have to pay around £263 per month to service this debt. This could prove to be unsustainable for some people, so they need to restructure their arrears in order to make them more affordable.

Speaking to the Daily Mirror, group director of Key Retirement Solutions Dean Mirfin said: "The figures reveal that many of today's pensioners are utilising credit cards to supplement their retirement spending.

"The reality for many, though, is that as their balances are increasing and many pensioners are only able to afford to make minimum repayments, they may never be able to clear the debt within their lifetime. It therefore is logical that many people are finding ways to boost pension incomes to free themselves from debt."

If people are struggling with debt, then there are a number of solutions they can consider. A debt management plan (DMP) could prove useful in helping consumers reduce their monthly repayments.

In order to qualify for the measure, individuals need to have debts above £1,500 and owe money to more than one creditor. Once the scheme is in place, creditors will normally agree to freeze interest, which means people have to repay less money than they might otherwise have had to.

By reaching an agreement with creditors, a DMP can also suspend actions against a person, such as County Court Judgements.

By James Francis