A new report reveals that pensioners across the UK are being left penniless as their money disappears every week in a whirlwind of bills, says Debt Solutions Company, Trust Deed Scotland.
An income of £207.15 per week is typical for most pensioned couples, but a report by Standard Life shows it goes straight back out the door as £207.24 is spent on food, fuel, housing and transport.
The report highlights rising inflation as the reason why the average pensioner has difficulties making ends and are being hit hard – many are having issues even affording a new pair of shoes, a holiday or a present for a grandchild.
While the Consumer Price Index remained the same in September at 4.5%, the Retail Price Index was hovering at 5.2% and threatening to rise again. Pensioner have a fixed income that doesn’t change from month to month, and that combined with inflation and large energy rises from utilities companies means turn some have turned towards credit cards to make ends meet.
A spokesperson for Scottish Debt Solutions Company, Trust Deed Scotland, said:
“According to Age UK, British pensioners are the fourth poorest in Europe, with the worst off set to lose up to 22% of their household income because of cuts to local authority services and changes to the tax and benefits system. This report highlights the dire position our parents and grandparents are in. At a time when they should be relaxing after a lifetime of working, they are pinching pennies and worrying about what the future will hold for them.”
The day before Standard Life published its report, the Institute of Fiscal Studies issued a warning about how ‘real’ inflation was hitting pensioners much harder than younger age groups.
“The Insolvency Service reported the fastest rising group of people claiming insolvency is pensioners,” said the spokesperson. “They are six times more likely to go bankrupt or take out a debt solution such as a Scottish Trust Deed or Debt Arrangement Schemethan they were just a decade ago. The number of people entering retirement with unpaid debts has increased, and when combined with increased life expectancy, the recession and limited options to increase income when you retire, it adds up to a lot of older people in real trouble”.
According to the Consumer Credit Counseling Service the average unsecured debt of newly retired pensioners is £21,370 and few have any savings at all. Once all the bills have been covered, there’s just £85 left at the end of the month.
“There are numerous reasons why pensioners are entering retirement in debt,” said the spokesperson. “Previous good house values led to many people remortgaging for home improvements or to loan to children or grand children for house deposits. There’s also the issue of divorce, where one partner will often buy the other out of their share of the property by extending their mortgage. And then some people are marrying and having families much later in life or having second families in their fifties.”
“For many life as a retiree in today’s world is just as expensive as it was when they were working, but now they have less income to live on.”