Debt Management Could Help Borrowers Approaching Retirement
Released
on: October 26, 2009, 2:37 am
Author: Melanie Taylor
Industry: Financial
Responding
to new research suggesting that more than half of over-50s in
Britain carry non-mortgage debt, debt management company Gregory Pennington has warned of
the risks of carrying debt while approaching retirement, adding
that good debt management is essential for anyone with problem
debts.
Research
from Moneysupermarket.com found that more than half (51%) of Britain's
over-50s population hold non-mortgage debt, at an average of £6,734.
Over
the past 12 months, 17% of over-50s in debt have reduced their
non-mortgage debt, according to the research, but 22% have taken
on more debt in this time. 5% said their debt had increased "a
lot".
48%
of over-50s whose debt had increased said they had gone further
into debt in order to pay bills. 15% of those in debt said they
believed debt would always be part of their life.
However,
48% of over-50s had reduced their outstanding borrowings over
the past year, with 21% claiming to be in a lot less debt than
they were a year previously.
Tim
Moss, head of loans and debt at moneysupermarket.com, said: "…
It's encouraging to see that a good number of Brits aged over
50 are taking active steps to reduce the amount they owe.
"However,
the fact that half of the people in this age group are still in
debt above and beyond their mortgages is alarming. Those aged
over 50 have to factor how long they can continue earning, and
begin thinking seriously about their finances in retirement; debts
that are currently easy to service could become a millstone round
their neck in later retirement years."
A
spokesperson for Gregory Pennington said that trying to pay down
debt in the run-up to retirement could affect the borrower's ability
to save adequately for retirement.
"The
over-50s age group are at a crucial stage in terms of financial
security. Hopefully, most will have saved a reasonable amount
towards their retirement in the form of a pension or something
similar, but many over-50s will hope to increase their savings
further in order to maximise their retirement income - and of
course debt can be a stumbling block in this situation.
"Over-50s
in debt are in a difficult situation: any money being paid towards
debt is money that would ideally be going towards a pension, but
at the same time it's important to pay off that debt as quickly
as possible, both to save money in interest and to pave the way
for increased savings once the debt has been paid off.
"Providing
the borrower is financially comfortable, there's no reason why
they shouldn't save and repay debt at the same time, but if the
debts are so big that the borrower simply can't afford to save,
then they should seek expert debt advice as soon as possible.
"A
debt adviser can offer help and guidance on a range of debt solutions
that can help the borrower to clear their debts and enable them
to start saving again."
Contact Details: Melanie Taylor
http://www.gregorypennington.com/
Pennington House
Carolina Way
South Langworthy Road
Salford
Greater Manchester
Melanie.Taylor@gregorypennington.com
0845 056 6480
2012
