The total amount of debt owed by the UK’s over-55s will climb to £294bn this year, a new report from more2life has indicated.

This figure is up from £272bn in 2021, and a leap of two-fifths (41%) from £209bn in 2017.

The research, published by equity release lender more2life and economics consultancy Cebr, also suggested the total is set to soar even higher over the next decade, to £402bn by 2032, which would mark a rise of 92% in just 15 years.

more2life revealed that most of this debt is held by younger retirees aged between 55 and 64 who are typically still working while repaying mortgages and supporting children. Total debt held by this group is expected to rise from £196bn last year to £210bn in 2022, while half (50%) also said they are currently in debt or have been in the past five years – a figure equating to 4.4 million people.

Over one in five (22%) over-55s also revealed that they have had credit card debt in the past five years which they had not paid off in full each month, a figure equating to 4.7 million people. The research, based on a study of 1,000 UK adults aged 55 and over, showed that the second most common type of debt was an overdraft, with 9% noting that they had used this solution over the same period.

more2life CEO, Dave Harris, commented: “Debt, whether it be a mortgage or credit card debt, is a fact of life for many people and allows them to achieve goals such as homeownership. However, with 40% of retirees already finding that their monthly outgoings outweigh their income, it is likely to quickly become a burden for some as the cost-of-living crisis continues.

“Over-55s are expected to borrow £22bn more than they did last year which is likely to be driven by higher interest rates and rising inflation. Servicing this borrowing will have an impact on those older people who are already on fixed incomes and may be providing some financial support for their families.

“While individuals need to consider how best to manage their own finances as they get older, it is vital that they consider all their assets. Living in a property you own but being too scared to turn the heating on and dreading a visit to the supermarket makes no sense at all.

“Specialist advisers are ideally placed to help people explore all their options and understand whether a later life lending product such as equity release might be the support they need.”

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