Baby boomers are going bust
As new research shows a sharp jump in the number of over-60s in mortgage arrears, we ask where did it all go wrong for the baby boomers?
Retirement should be something that we look forward to; many people work hard throughout their lives, thinking that they will be able to relax in later years and take time for the pleasurable things that working life never allowed for.
In the past, the rose-tinted view was that this was the time where the mortgage would be paid off and a reliable pension would kick in to support day-to-day life. Maybe even a tidy sum of savings would tide you over for those luxuries such as holidays and treating the grandchildren.
Is it a dream?
This worry-free ideal seems to be becoming more of a dream as we see more and more of the opposite. This isn’t new news; last year we highlighted the contradictory message that older people own everything and nothing. We’ve seen a shift over the past decade that’s resulted in 427,000 households in the over-70 age group being in 'financial difficulty'.
We’ve also shown that debt increases with age. Under-25s owe an average of just over £6,000 while the 60s and over owe a much higher amount, averaging at nearly £25,000.
Our latest study contains yet more evidence that the baby boomers are struggling. Most worryingly, the statistics relate to one of the most important things in life – the roof over our heads.
The number of older people seeking help with mortgage arrears is on the rise. The number of over-60s contacting us with mortgage arrears since 2009 has risen by 44% (also see our online map visualising the upsurge), compared to an average increase of just 3% across all age groups.
So why is this happening?
We know that people can fall into debt for all sorts of reasons, but is there a specific background as to why this is happening? Here are some of the explanations that we see at CCCS:
- Benefit and pension changes, including cuts to winter fuel payments, along with cost of living increases means that there’s simply not enough coming in to cover the bills.
- More people plan to work past state pension age, however unexpected changes such as illness or bereavement mean this is no longer possible.
- Elders are putting themselves at risk by helping the younger generation stay out of debt.
There are many more reasons as to why older people are struggling (and you’re welcome to suggest them in the comments section below), but what can we do to help?
CCCS and older debt
Friends and family play a vital role in ensuring that our older generation have access to the help and advice that they need. As we all know, there are plenty of companies out there that will prey on the vulnerable to benefit themselves.
It’s important that people are educated about money management. In the past we’ve generalised that older people are better at managing money and saving for things because the plastic wasn’t available back in their day. Equity release may be a solution in some cases and we encourage that family members play a role in the decision-making process.
It seems as though this is no longer the case and many now rely on credit cards to fund everyday expenditure. We need to ensure that they’re aware that outgoings, such as the mortgage, are more important than paying the unsecured creditors.
Some might say that the older generation struggles with the stigma of admitting to being in debt, but we’re here to remind you that no matter how young or old you are, there’s help at hand and we can help you to find a solution in the strictest of confidence.
If you, or someone you know is having money worries, you can use our anonymous online counselling service Debt Remedy or call our Helpline (free including calls from mobiles) on 0800 138 1111. We’ll go through your situation and explore all of the solutions that are available. You might also find that our retirement guide helps to put your mind at ease.
Don’t forget to let us know your thoughts by adding your comments below - we’d love to hear why you think the debt generation is getting older.