Over-55s struggle with rising unsecured debts

By UK CreditCards.com

The financial situation of Britain's older generations appears to be worsening, according to the latest research from insurance group Aviva. The company's Real Retirement Report suggests that over-55s are contending with falling incomes, low levels of savings and rising debts. Many have unsecured borrowing products, such as credit cards or personal loans.

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Dual impact of fall in income and low savings
Britain's older people are struggling to meet the rising cost of living, according to Aviva. The company's research, which is based on online interviews with more than 10,000 over-55s, found that the typical monthly income for people in this age group has fallen from £1,294 in June 2011 to £1,216 in September 2011. There has also been a 12% drop in savings over the last three months, with the average over-55 now having just £10,468 set aside for a rainy day.

Report shows rise in average debt
Meanwhile, levels of unsecured debt have risen since May 2011. Aviva found that while the majority of over-55s are not in debt, those who do owe money are typically £20,001 in debt. According to the report, 40% of 55 to 64-year-olds have credit cards, along with 33% of over-65s. Experts believe the recent rise in unsecured debt may be due to people borrowing to pay for holidays or unexpected bills.

Over-55s are struggling, says expert
Clive Bolton, director of Aviva's 'at retirement' division, believes the report shows older people are struggling to keep up with the rising cost of living on a relatively fixed income. He revealed that one in four over-55s have less than £500 in savings, while 40% are not managing to save at all.

"While there is a limited amount that the long-term retired can do to improve their finances, these figures highlight the importance of a lifetime approach to retirement planning," Mr Bolton advised. "Taking out a private pension, building up a respectable savings pot and paying down debt are all simple steps that people can take to ensure they don't face these problems in retirement."

See related: Study: Worst consequences of recession 'still to come'; Number of cash-strapped Brits at all-time high

Published: 22 September 2011