A significant number of people over the age of 55 saw their financial outgoings exceed their income during parts of 2022, research from more2life has indicated.
New data published by the equity release lender and economics consultancy, Cebr, showed that around two in five over-55s (39%) saw spending exceed income last year, with a growing number also turning to unsecured borrowing to cover shortfalls.
more2life revealed that the number of people whose spending exceeded their income every month has more than doubled, from 3% in 2021 to to 8% in 2022. The lender stated that figure could equate to 1.5 million over-55s who have taken on debt in 2022 – a year when interest rates on credit cards hit historic levels.
The research was based on responses from over 1,000 UK adults, and more2life added that of those seeing expenditure exceed their retirement income, two thirds (66%) are turning to cash to make up the shortfall, while a fifth (20%) use the unsecured debt of a credit card – a figure up slightly on the 18% who reported the same last year.
To prevent falling even further into debt, a third (34%) of over-55s reported that they have had to be more careful with their spending and buy cheaper options. A fifth (20%) revealed they have had to cut down on the amount they buy, while slightly fewer (18%) reported they were being more careful with utilities.
“Debt among over-55s is becoming more and more common,” commented director of manufacturing and adviser propositions at more2life, Les Pick.
“For a lot of younger people, when costs are up and bills begin to rise, they can look to pick up extra hours at work to make up the difference or even seek a pay rise. These are solutions which are not available for many retirees on a fixed income – no matter how carefully they have planned their retirement.
“However, with a substantial amount of over-55s owning their own home, they do have other resources to consider and this adds weight to the argument around why it is vitally important to take a holistic view of your later life finances.”
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