Drowning in debt – Older persons are surviving on overdrafts or bank cards

Millions of pensioners are drowning in debt as they wrestle to remain afloat within the cost-of-living disaster, a surprising report has warned. Faced with hovering costs, many are borrowing extra and turning to overdrafts and bank cards to pay their payments.

As many as 3.4 million folks aged 50 to 69 and 670,000 over-70s have borrowed more cash or used extra credit score up to now month in contrast with a yr in the past.

And 1.3 million over-50s had a bounced direct debit or standing order or a invoice they weren’t capable of pay in that point, in keeping with a hard-hitting report from Age UK.

The charity warns that life is more likely to get more durable for the aged within the winter, notably these on mounted incomes. High power payments have depleted older folks’s financial savings and left many struggling, it mentioned.

Caroline Abrahams, charity director at Age UK, mentioned: “The energy bill crisis is far from over. We’re not hearing as much about it at the moment because far less energy is used through the summer.

“But the fact is that some older people are still struggling to pay their energy bills from last winter and many more don’t know how they will cope in a few months, when the temperatures fall once again.

“Millions of older people whose careful budgeting has been overwhelmed by soaring energy bills desperately need the certainty of a discounted energy deal to help them through the coming winter.

“A Government-funded energy social tariff available to everyone in or at risk of fuel poverty would make a huge difference to their ability to make ends meet, and to their peace of mind.

“It is crystal clear that we need a permanent solution to the energy bills crisis – one that provides older people with the reassurance that they will never face that terrible ‘heat or eat’ dilemma again.

“If the Government does not provide urgent financial support to help those most in need, we have no doubt that many older people will face unacceptable levels of hardship again this winter.

“And, worryingly, we know they are often less well placed to withstand it than they were last year, having run down their savings in the meantime.”

Seventy p.c, or 10,388, of Age UK’s members are nervous as a result of their funds or these of a liked one have been severely affected by power payments.

This is supported by statistics displaying 45 p.c, or 11.3 million, of these aged 50-plus at the moment discover it troublesome to afford their power payments. 1 / 4 of these over 50 couldn’t afford an surprising however vital expense of £850, it was mentioned.

The new report, entitled Tackling the Cost-of-Living Crisis: What the Government Must Do, additionally highlights analysis that implies
1.7 million over-55s count on to must preserve working indefinitely as they can’t afford to retire. As many as 16.9 million over-50s noticed their value of dwelling go up in June in comparison with May.

Two in 5 are actually spending much less on meals and different necessities in a bid to stability the books. Almost half (42 p.c) say they will be unable to avoid wasting any cash within the subsequent 12 months.

More than two-thirds of these aged 70-plus – some 5.8 million – have skilled a rise of their value of dwelling in contrast with a month in the past. And 19 p.c of the over-70s and 49 p.c of fifty to 69-year-olds are struggling to pay their hire or mortgage. Not surprisingly, pensioners on very low mounted incomes are among the many worst affected.

But so too are the estimated 450,000 pensioners with an revenue as much as 10 p.c increased than the Pension Credit qualification threshold. This means they miss out on decrease council tax, a free TV licence if they’re sufficiently old and different advantages.

Age UK is asking on the Government to behave now and cut back power prices. It wish to see the introduction of a social tariff – a reduced power deal – for disabled folks, unpaid carers and people on decrease incomes.

It additionally desires to see a prepayment meter amnesty to present all households with a meter the chance to have it ­uninstalled and obtain sufficient compensation. The Age UK report follows latest knowledge displaying greater than 1,000,000 pensioners will nonetheless be saddled with costly mortgage funds in retirement.

As many as 1.45 million householders with a mortgage suppose they are going to be older than 65 by the point they’ve paid down their residence mortgage. Almost one in 10 count on to be 70 or older – or by no means pay it off in any respect, discovered the Hargreaves Lansdown ballot of two,000 older mortgage payers.

Among these aged 55-plus who nonetheless had a mortgage, one in 5 anticipated to dump it over the age of 70, whereas seven per cent admitted they’d by no means be capable to repay the complete quantity. Dean Butler, of finance firm Standard Life, mentioned: “Those who were planning to retire in the near future but still have mortgages or other debts face a tricky decision as the cost of borrowing continues to rise.

“The state pension by itself isn’t enough for a comfortable retirement, even without housing costs or other debts. And many don’t have enough saved in private pensions to bridge the gap.”

• Older folks, their households and mates in search of help ought to visit ageuk.org.uk/support or name the Age UK recommendation line on 0800 169 65 65.