One in four people are approaching state retirement age with outstanding consumer credit commitments, owing four times as much as their counterparts did ten years ago, according to a new study by Bristol University’s Personal Finance Research Centre.  The research found over 50s and early 60s owe on average £3,000 and £2,000 in unsecured credit respectively.

While credit levels are on the increase across all age groups, mean amounts owed by credit users in their late 50s and early 60s are higher than any other age group, meaning that some people are approaching retirement owing substantial sums of money in unsecured credit.

Key outcomes of the report, commissioned by Help the Aged and Barclays, include:

· credit users in their late 50s and early 60s owe on average at least four times as much in unsecured credit as their counterparts did a decade ago;

· a quarter of all people approaching state pension age have outstanding consumer credit commitments.  Outstanding credit commitments increase the risk of financial difficulties by 26 times;

· levels of credit use may already be forcing people to delay the timing of retirement;

· half of households headed by someone in their 50s, one in eight over 60s (over 1.5 million) and 4 per cent of people aged 80-84s (about 60,000) are still repaying a mortgage; and

· arrears on credit commitments are most common among people in their 50s and 60s, but among those aged 70 or over, utility bills are the main area of financial difficulty.

David Sinclair, Help the Aged Head of Policy said: “This report shows that there are some worrying trends in credit usage that could represent a debt crisis for those coming up to retirement.  We know from working with older people suffering from chronic debt problems that even relatively small levels of debt cause untold misery when living on a fixed income.”

Professor Elaine Kempson added: “There have been growing indications that people are entering retirement with outstanding mortgages and personal credit commitments. This report shows that, although it is restricted to a minority, it does cause financial difficulties for the people concerned.”

The research was commissioned to support the work of a nationwide money management programme called Your Money Matters, run by Help the Aged in partnership with Barclays, that offers older people free and impartial money management and debt advice.  It helps people who are struggling with problem debt and those who are having difficulty managing their finances on a fixed income.

All statistics are from the report Debt and Older People, by the Personal Finance Research Centre at the University of Bristol. The report is published by Help the Aged.  A copy can be ordered by calling 020 7239 1946.