Preston, Lancs (PRWEB) August 13, 2008
The analysis based on 4,507 people in the UK aged 55 and over who released equity in their home with Key Retirement Solutions in 2007, reveals the average unsecured debt across loans, credit cards, and overdrafts to be broken down as follows:
- Personal loans: almost one in four have outstanding loan payments owing £8,766 on average per head.
- Credit cards: a fifth have outstanding card debts and owe £8,358 on average per head.
- Overdrafts: just 3% are in the red, but £3,667 is owed on average per head.
The situation worsens when taking into account the average outstanding mortgage debt which stands at £37,316 per head for this age group.
The greatest concern is that the further people reach in retirement the deeper in debt they seemingly become. The total unsecured debt for those aged 55-59 is over 2.5 billion this takes on a huge increase of 747% reaching a total of over 22 billion for the over 70s, which is on average £10,659 per head with an average monthly payment per head of £244.
As voluntary pension contributions made by UK adults have almost halved in the past 12 months, and the costs of goods and services purchased by pensioners have rocketed by 36% since 1998 - faster than the rise in the Retail Price Inflation which has shot up by 32% over the same period, this is a trend which looks likely to continue for generations to come if their outstanding debts continue.
Dean Mirfin, Business Development Director at Key Retirement Solutions said: "As the cost of living is on the up, these figures, even if they are only part reflective of pensioners as a whole, are of real concern. Retirement should be a time to enjoy yourself after all those years of hard work, yet 1 in 20 people in their 60s, 70s and 80s admit to constantly struggling to keep up with financial commitments or having fallen into arrears.
"The cost of living for the elderly has surpassed inflation over the past decade therefore it is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt. This could be one reason why the equity release market has remained buoyant despite the economic downturn, as more pensioners are looking to the equity in their property as a way to pay off outstanding debts.
"For anyone looking to release equity from their home to help ease the financial burden in retirement, Key's independent guide to equity release is the best place to start."
Chris Tapp, Director of charity Credit Action, comments on Key's findings: "For many pensioners today these figures show it's a case of 'bought then, worrying about it now.' With the cost of living increasing dramatically - particular as winter approaches and fuel costs mount up - it is vital that those struggling are given the help they need to ensure that people aren't trapped by debt but are given the necessary advice and support to enable them to stay in control of their money and their lives."
For further information, or to receive a full copy of the Key Retirement Solutions report, including tables and footnotes, please contact Dean Mirfin or visit http://www.keyrs.co.uk/press.
About Key Retirement Solutions
Key Retirement Solutions is the UK's leading independent equity release specialist, currently conducting 31% of all SHIP (Safe Home Income Plans) intermediary equity release business in the UK.
Key Retirement Solutions (KRS) is an independently managed company following the management buy-out from Chesnara, formerly part of Countrywide Assured Group plc, on 1st July 2004.
KRS is also a leading member of SHIP, the equity release industry body, and has campaigned rigorously and effectively with SHIP for regulation across the equity release sector. This campaign was rewarded by the Governments confirmation that they will regulate home reversion plans, which will bring them in line with lifetime mortgage regulation.
Tel: 020 7294 3676
Dean Mirfin, Business Development Director
Key Retirement Solutions
Tel: 07879 678737