In a recent article we reported on research carried out by the British charity StepChange, which showed that problem debt is costing the UK in the region of £8.3 billion a year. Traditionally, debt has been a much bigger problem in the under-40 age group, but a new study recently revealed that debt among the country’s over-55 population is rapidly increasing.
According to insurance firm Aviva, debt among this age group has surged by nearly 20% over the last year, as Britons seem to have once again adopted a lifestyle of high spending.
The average individual in this age group now owes about £1,680 in unsecured debt, significantly higher than the figure of £1,420 recorded a year ago.
While overdraft debt has also shown an increase, the problem areas mainly seem to be credit card debt, which has increased by 10% compared to the same time last year, and personal loan debt, which has surged by nearly a third over the last year.
The insurer ascribes the relatively high debt levels to people whose house prices have increased rapidly and they now feel confident to spend their savings.
Aviva issued a stern warning that individuals approaching retirement age should under no circumstances waste their savings in the belief that house values will continue to appreciate, thereby increasing their overall wealth.
The thought that this might make up for any shortfall in pensions could be completely erroneous.
That is sound advice for those who are not yet in debt. Those who have already slipped into debt should get expert debt management advice before their credit ratings are severely damaged.