You are here: Home - Credit Cards & Loans - News -

Over-55s credit card debt reaches six-year high

Written by: Paloma Kubiak
Credit card debt among those aged 55 and over has reached a six year high of £1,052, up 9% from the previous year.

Both secured and unsecured debts are a growing concern for over 55s.

According to Aviva’s Real Retirement Report, credit card debt is considerably higher among those in employment. Those over 55s with jobs owe 76% more (£1,296) than their retired counterparts (£737).

This age group is also turning to other forms of unsecured debt, including personal loans and overdrafts.

Aviva found the average amount owed on overdrafts is at a modest £91, but this figure has increased 17% in the past year and is at its highest point since winter 2015.

Looking at all debt accumulated (excluding mortgages), the over 55s who are working were found to owe twice as much (£1,490) as those who had retired already (£1,314). Servicing the debt may be a reason why people work later in life, said Aviva.

The report also found that almost a third (31%) of homeowners aged 55+ are still paying off a mortgage, compared to just 8% of retirees.

The average amount spent on housing by this group has decreased from £315 per month in 2016 to £295 in 2017, which is likely to be influenced by low interest rates.

However, the average mortgage debt is now £68,612, up 14% since last year (£60,106 – Q2 2016), which could be linked to an increase in people carrying interest-only mortgage debt into retirement.

Lindsey Rix, managing director, savings and retirement at Aviva, said: “A growing number of Britons are prolonging their working lives and our findings suggest the goal of a debt-free retirement may be one factor behind this. The approach to retirement is ideally a time for saving and careful financial planning, but with the rising cost of living, many people are having to resort to borrowing and still have mortgage repayments to factor into their budgets.

“With widespread speculation that interest rates may rise for the first time in over a decade, this record level of debt is worrying. An increase in the cost of borrowing will undoubtedly create challenging conditions for people to navigate on the approach to retirement.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Bereaved parents to receive two weeks’ paid leave

Employed parents grieving the loss of their child will have the right to two weeks’ paid leave, under proposed laws...