Older people own everything and nothing

Debt is not just a problem for young people - many older Brits are struggling too.

Over-60s own nearly 50% of the UK’s net assets but then at the same time winter fuel payments are being cut, projected pension payouts have been chopped and we’ve found hundreds of thousands face penury. Why the contradictory message?

We recently released our latest report, Debt and the Generations, focusing on personal debt within and between generations. It’s one of the many weighty reports we regularly produce for the likes of policymakers and politicians to show how Britain is coping with its personal debt crisis.

One of the major concerns we raised within its pages was that a huge number of pensioners are being hit by the personal debt crisis, just as younger people are.

Within the detail of the report are two interesting, perhaps contradictory, points:

• In 2003 it was found that 48% of our country’s wealth was in the hands of the over-60s and 27% owned by the over-70s (and this may have become more pronounced due to the increases in property prices in the run up to the 2008 financial crash)

• This year we found that 427,000 households in the over-70 age groups are ‘in financial difficulty’, either three months behind with a debt repayment, subject to some form of debt action such as insolvency, or ‘at risk’ of falling behind.

Are pensioners well off?

Taken as a generational group, the British Household Panel Survey in 2003 found that over-70s had around 13 times more assets than debts. Compared to the indebted 30-49 year olds (the time of life when mortgages bite and debts understandably outweigh assets) the older generation could seem quite immune to debt problems. And perhaps as a group they are.

But within the mature generation there’s a definite sense of the haves and the have-nots. And since the 2003 figures were collated older people have lost many billions, through the likes of failed stock market investments, projected pensions not becoming the reality, and in below-inflation savings rates.

There’s also the fact that equity is usually tied up in houses, and can only be released by selling. If no one’s buying, then any equity remains an unrealised asset.

Perhaps most surprisingly, we found that those aged 70 or over still owe an average of £46,000 on their mortgage.

So it’s perhaps not a shock to learn that there are a huge number of pensioners that are suffering from problem debts, so much so that among our clients a small but significant number of those aged 70 plus are barely making ends meet. They have no money to repay even their debts once they’ve covered the cost of their living expenses.

Debt and the older generation

What can you do if your household is one of the 427,000 facing financial difficulty?

First things first, you need to contact CCCS. There’s no embarrassment in admitting that you’ve got a debt problem, and our counsellors will talk you through any feelings that you’ve let yourself (or your family) down.

In common with debt among all generations it’s not that you’ve spent too much on fancy TVs or clothes. It’s much more likely that you’ve just tried to get by despite what life’s thrown at you.

We recently listened into a counselling call with an 84-year-old man who had fallen behind with his credit card repayments after caring for his housebound wife. He previously had an unblemished financial record going back nearly 70 years but the credit card company were now threatening bailiff action.

During the phone call he kept saying, in a sad but dignified voice, that he’d failed. He hadn’t; he was simply another victim of circumstance.

There’s no stigma in admitting to a debt problem nowadays. It’s part of many people’s lives. As we’ve mentioned, hundreds of thousands of other pensioners are in the same boat as you, and we can help. Give us a ring, or if you’re internet savvy use our online counselling service CCCS Debt Remedy.

There are many older people that’ll never need our help. They’ve got the net assets to live out their lives in relative comfort. Others will need a solution and it doesn’t matter whether you’re 18 or 80, we can help.