Pensioners Still Facing Loan Debts

Fri, 30 Apr 2010

Having been hit hard by falling interest rates on their savings, a number of pensioners in the UK are having to free up money from their homes in order to meet debt repayments . New figures from equality release specialists Key Retirement Solutions have revealed that half of people aged 65 and over who are looking to unlock money from their home have considerable debts outstanding. Of these borrowers, the average debt level is £35,991, with money owed on mortgages, personal loans, credit cards and overdrafts .

Indeed, 27 per cent of those debtors still had a mortgage, on which they owed an average of £45,600. The average level of credit card debt stood at £9,000, compared with £10,447 from personal loans, and £4,290 on overdrafts. Pensioners aged 70 or over were particularly indebted, with average debts of £40,958, compared with £29,314 among those aged between 65 and 70.

Pensioners have been one of the worst affected groups by the credit crunch. The decision by the Bank of England to cut the base interest rate to 0.5 per cent has seen interest rates on savings accounts dwindle, vastly diminishing the income of pensioners who rely on their savings.
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