10 Oct 2019
Number of Over-55s in Credit Card Debt on the Rise
Research compiled by equity release lender More2Life has revealed that the number of over-55s with credit card debt in 2019 is nearly 20% higher than last year.
The figures show that the amount of over-55s who have found themselves in debt over the last 5 years, and have used credit cards to borrow, has reached 54%. When compared to last year’s figure of 37%, it’s clear that there has been a noticeable hike in the number of over-55s turning to credit cards.
More2Life’s research has also found that credit cards are now the second most commonly used borrowing option for the age group, with mortgages taking the top spot. Almost a third of the group use credit cards for everyday costs. A fifth use them to support their lifestyle, while 24% use them for large purchases such as cars and holidays. In addition to this, 23% of this demographic rely on their bank account overdrafts to supplement their income.
Perhaps more worryingly, this study has also revealed that the number of over-55s who are leaving bills unpaid has doubled since last year. Whereas other members of the age group have admitted to turning to credit cards in an attempt to clear outstanding debts, including mortgage payments.
Dave Harris, CEO at More2Life, said: “As older generations enter retirement with lower pension pots but arguably more financial responsibilities than their predecessors, it is perhaps unsurprising to see that many are turning towards borrowing to help fund their later lives. Whilst credit cards have become a normal part of many people’s financial management and some will be comfortable servicing this debt, this is not true for everyone.
“If you are unable to pay your bills and borrowing on credit to keep afloat then it is vital that you consider all your financial options as it is only likely to get worse.”
Harris went on to explain that over-55s may not be aware of all the options that are available to them. If this is the case, he suggests that seeking help from specialist financial advisers may be able to help the age group to manage current debts or avoid accumulating them in the future.