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Pensioners Face High Prices Coupled With Large Debts

by Jim ONeil on August 26, 2011

in Personal Finance Tips

In the Yorkshire area, an increasing number of pensioners are finding themselves squeezed between increasing prices and high repayments for debt. The Yorkshire Post obtained statistics revealing the amount owed by pensioners seeking advice from a debt charity. For loans, credit cards, and other unsecured credit, the figure averaged £19,758.

Fifty-one percent of Yorkshire pensioners contacting the Consumer Credit Counseling Service (CCCS) had a minimum debt repayment that exceeded the state monthly pension. Prior to the debt counseling, the minimum monthly payments averaged £621. This is almost one and a half times the state pension amount. CCCS spokesperson Matt Hartley reported that the rising costs of energy and food are problematic in themselves, without adding high credit card and loans debt repayment.

CCCS External Affairs Director Delroy Corinaldi stated that the statistics revealed that debt is an alarming problem among older UK residents. There is a concern that an increasing number of these individuals could fall into “serious debt,” said Corinaldi. The CCCS reports that its pensioner clients throughout the UK owe an average of £20,831 for credit cards, loans, and other forms of unsecured credit.

According to Age UK Enterprises, most pensioners exist on low to middle incomes. Many of them have been severely impacted by the increasing cost of energy and food because a larger portion of their budget is spent on these items. Since 2008, residents over age 55 have experienced a £984.28 increase in living costs, compared the entire UK population.

Low interest rates are partially responsible for this gap. Low mortgage loans APR has decreased mortgage payments for most homeowners. Older residents receive less benefit from this because they are not as likely to have mortgage loans debt. Though this impact has decreased over the past few months, anticipated increases in energy prices may cause a further rise in inflation.

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