Worrying evidence has emerged that increasing numbers of older people are struggling to service debt including mortgages, loans and credit cards.
Age Concern Enterprises the financial services arm of the UKs charity for older people has warned that at least one in 10 enquirers calling their equity release helpline are cash-strapped home owners.
Phil Veale, financial services development manager at Age Concern, says: “Increasingly our customers are telling us they are struggling to cope with their mortgage repayments while trying to get by on a state pension.
“People getting into debt is nothing new, and we know that the burden of UK consumer debt, including mortgages, is now around the 1trillion mark.
“What is of real concern however, is the fact that many people who can least afford it may be tempted to go to high charging debt consolidation companies, rather than explore more appropriate options such as an equity release plan.
“Reasons for older people building up significant debts typically include the need for home improvements and a range of unsecured borrowings, such as credit cards and personal loans, which have built up over time.
“We have examples of people which are by no means isolated cases of 80 year old home owners who are struggling to clear their mortgages. Coping with mortgage repayments is not easy at the best of times, but for an octogenarian it can be financially disastrous.”
One of the reasons for people getting into financial difficulty is the plain fact that their income isnt sufficient to cover their outgoings. Often what they need is a modest increase in income to prevent them getting into debt in the first place. While the likes of daytime television advertising for debt consolidation companies can be seductive, Veale says that older home owners need to be more aware that they can release equity from their properties to help manage debt.