Almost a third of over 50s are in the red, by an average of £12,000
Four million have credit card debt; 1.7 million have a personal loan
Over 50s will spend the next 2.5 years repaying debt
3.4 million say they did not expect to be in debt at their age

Almost six million1 over 50s will be spending the next two-and-a-half years repaying an average of £12,000 debt, new research from Saga Equity Release has uncovered.

In Saga’s poll of more than 1,0001 over 50s, three in 10 (29%) are currently repaying debts outside or in addition to their mortgage. Some two thirds (67%) – equivalent to four million people – have borrowed using a credit card, while just over a quarter (28%) have a personal loan. One in five are using their overdraft.

This nationally representative group reported average debts of £12,218, but the research discovered that women were more heavily indebted than men; women owe an average of £15,148, 55% more than the £9,739 owed by men.

The most common reason for borrowing among over 50s was to buy something that they couldn’t afford at the time, yet one in five (21%) said they borrowed because they were struggling to pay bills. Just over one in seven (14%) borrowed to make home repairs, while one in 10 (10%) have got into debt because they lost their job.

Further research revealed a variety of reasons for borrowing money. Many over 50s take advantage of 0% finance deals on credit cards to pay for insurance, new cars and home renovations – one 66 year old pays for his home, car, travel and pet insurance policies in full on a 0% credit card to get discounted rates and then pays the balance back monthly. Others mentioned borrowing to help out family members – one 54 year old woman borrowed to help her husband publish a book.

One in five (21%) over 50s believe they’ll be debt-free in 12 months’ time, but on average they believe it will take them more than two and a half years to pay back the money they owe. One in 10 (10%) said they don’t think they will ever pay off their debts.

Most over 50s are managing their debt sensibly. Some 60% said that they can afford to repay their debts and still live comfortably. However, almost three in 10 (29%) said that they are struggling to repay their debts, and one in four felt overwhelmed by the amount of money they owe. Tellingly, almost 60% of over 50s with some who have borrowed money said they were not expecting to be in debt at their age.

Commenting on the findings, Joanna Fowler, head of equity release at Saga Personal Finance, said:

“It’s good to see that the majority of over 50s are taking advantage of borrowing sensibly to do the things they want in life and find the best deals. If you can afford the repayments, borrowing in retirement can be a useful way to fund your dreams.

“However, our research has found that a significant minority of people are struggling. If this is the case, there are plenty of options available to help them consolidate and manage their debts. Equity release is one of those options, and while it won’t be right for everyone, over 50s in this situation could find it worth speaking with a specialist adviser, who will discuss the alternatives and formulate a plan to bring some welcome relief from the pressure that owing money can bring.”

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