A study carried out earlier in the year found that as many as a third of pensioners in the UK are affected by debts of £25,000 or more. The recent economic crisis has affected the vast majority of the population, none more so than people aged 65 or over.
There are a number of reasons why pensioners have been hit the hardest by the recent economic downfall. Firstly, with interest rates being at a record low, those people entering retirement receive a lower return than expected from their pensions. In addition, the rising cost of living is making it increasingly difficult for many households.
Many pensioners are forced to fund their retirement through various means of credit – namely credit cards, unsecured loans and overdrafts. Naturally, it is a worry that people will be entering retirement in a position of debt and to avoid having these debts spiral out of control when it comes to the point when pensions are the main source of income, it is highly advisable that people do everything they can to either clear or reduce these debts as much as possible before retiring.
A recent statement from the Consumer Credit Counselling Service claimed that around 427,000 households with people over the age of 70 in them are in a situation of financial difficulty. This is the situation whereby debt repayments are behind by 3 months or more or there is a real risk that falling behind with payments could occur. They also warned that the situation is set only to worsen, as inflation continues to rise.
If you are approaching retirement, it is highly advisable that you try to clear as much debt as possible before you rely solely on a pension as a source of income. There are a number of options available to reduce or clear your debt entirely; more information on which can be found at IVA Zebra. Act now and save yourself from financial hardship during in retirement.
