Older parents are plagued by rising debt levels

StepChange formally known as the Consumer Credit Counselling Service (CCCS) and a leading debt charity, has seen a rise in the number of people over 60, with dependent children, struggling financially.

Four years ago, only 407 cases required StepChange’s assistance, however, in 2012, 627 people needed help; representing a 50% increase.

The charity continued by saying that dependent children could be the most likely reason behind over 60’s struggling with debt.

Debt levels

The average debt of parents in their 60’s, with dependent children, was in excess of £33,300, whilst those with no dependents, had less debt, with on average £27,800 owed.

However, the gap between single parents, with and without dependents, is actually quite small, with average debt levels of £17,838 and £16,540 respectively.

StepChange found that much of the debt had been accumulated on credit cards. Surprisingly it was also found that older generations are more likely to have significant debt on credit cards than younger people. The average amount owed by the over 60’s on credit cards exceeds £15,000, compared to £10,000 amongst younger age groups. Other methods of debt accumulation often include catalogues, overdrafts and store cards.

As long as couples continue to have children later on in life, unemployment rates among under 25’s remain high, and the cost of university education continues to rise, experts believe the problem will continue.

Rising costs

The charity is also reporting that children are having a hard time moving out of their parents’ house, as house prices are continuing to increase and a lack mortgage availability is continuing have an effect. The government continue to spend billions on various schemes, such as Help to Buy, to help first time buyers get onto the housing ladder. Although, many experts believe pensioners could be contributing to their own failings, as many single parents may struggle to let go, when their child should leave.

Earlier this month, figures from the Office for National Statistics (ONS) revealed further concerns for pensioners. The ONS found that 11.2% of homeowners aged 65 or over had concerns over an outstanding mortgage in retirement.

Delroy Corinaldi, External Affairs Director at StepChange Debt Charity, said: “The rise in people seeking the charity’s help with their debt who are over the age of 60 and who still have dependent children is expected as people increasingly have children later in life.”

Corinaldi continued: “It presents new challenges, particularly those who might be caring for their elderly parents as well, and it is crucial that people factor this in to any decisions on building up debt.”

Experts are urging the elderly who may be in financial difficulty, to get advice immediately. Problems with debts such as high interest payday loans, where the interest rate can often exceed 1,000% and credit cards, could lead to significant financial problems if not attended to sooner rather than later.