nigel woollsey

Nigel Woollsey

Online Writer
Published: 20/11/2019

New research published this week by equity release lender, more2life, reveals that 35% of over-55s say their expenditure already exceeds their income. In fact, more than two-thirds (68%) of these are using their cash savings to plug the gap and around a third plan to use a credit card or their bank account overdraft to cover their income gap.

Over half of those surveyed did not have enough in cash savings to cover an unexpected bill of £5,000 and 12% would need to borrow money to pay for a sudden event such as a boiler breakdown.

A further 25% believe that the increasing cost of living will push them into the red this year.

Money worries in later life

According to The Money Charity, UK household debt has grown to £1,650bn, a 3% increase in 12 months to the end of August 2019. We revealed recently about the rising debts of those aged over 55, where Bank of England data showed a 47% increase in debt for this age group in the past five years.

Those approaching or in retirement are feeling the pinch, as increasing debts and pension shortfalls highlight that far from being a time of increasing financial comfort and security, many face a time of tighter budgets and a smaller pension pot than anticipated.

Commenting on the results of its survey, Dave Harris, CEO at more2life, said: “Fewer over-55s are enjoying a financially carefree retirement, a fact that we can in part attribute to smaller pension pots, greater financial responsibilities and longer retirements.

“This research highlights that for some people retirement is far from relaxing and they are one large bill away from real financial hardship.”

Help to become debt-free

With the Citizens Advice Bureau reporting a 14% increase in debt advice cases in September 2019, those over-55s struggling to make ends meet or paying back their debts should talk to a debt advice charity, such as the Citizens Advice Bureau or Step Change.

For borrowers looking to become debt-free, our financial guides, such as How does a current account overdraft work?, Seven steps to getting (and staying) overdraft-free or Free yourself from credit card debt, contain useful advice on staying in control of and reducing debts.

Alternative options to generate income

Those in or nearing retirement and who own their own property have a potential source of additional income in the form of equity release – a way of using the equity built up in your home to bolster your retirement income and repay debts. Independent advice is a must as this is a decision affecting both you and any potential beneficiaries of your estate in the future.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

retired couple looking at finance documents

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