Millions of pensioners are drowning in debt as they struggle to stay afloat in the cost-of-living crisis, a shocking report has warned. Faced with soaring prices, many are borrowing more and turning to overdrafts and credit cards to pay their bills.
As many as 3.4 million people aged 50 to 69 and 670,000 over-70s have borrowed more money or used more credit in the past month compared with a year ago.
And 1.3 million over-50s had a bounced direct debit or standing order or a bill they were not able to pay in that time, according to a hard-hitting report from Age UK.
The charity warns that life is likely to get harder for the elderly in the winter, particularly those on fixed incomes. High energy bills have depleted older people’s savings and left many struggling, it said.
Caroline Abrahams, charity director at Age UK, said: “The energy bill crisis is far from over. We’re not hearing as much about it at the moment because far less energy is used through the summer.
“But the fact is that some older people are still struggling to pay their energy bills from last winter and many more don’t know how they will cope in a few months, when the temperatures fall once again.
“Millions of older people whose careful budgeting has been overwhelmed by soaring energy bills desperately need the certainty of a discounted energy deal to help them through the coming winter.
“A Government-funded energy social tariff available to everyone in or at risk of fuel poverty would make a huge difference to their ability to make ends meet, and to their peace of mind.
“It is crystal clear that we need a permanent solution to the energy bills crisis – one that provides older people with the reassurance that they will never face that terrible ‘heat or eat’ dilemma again.
“If the Government does not provide urgent financial support to help those most in need, we have no doubt that many older people will face unacceptable levels of hardship again this winter.
“And, worryingly, we know they are often less well placed to withstand it than they were last year, having run down their savings in the meantime.”
Seventy percent, or 10,388, of Age UK’s members are worried because their finances or those of a loved one have been seriously affected by energy bills.
This is supported by statistics showing 45 percent, or 11.3 million, of those aged 50-plus currently find it difficult to afford their energy bills. A quarter of those over 50 could not afford an unexpected but necessary expense of £850, it was said.
The new report, entitled Tackling the Cost-of-Living Crisis: What the Government Must Do, also highlights research that suggests
1.7 million over-55s expect to have to keep working indefinitely as they cannot afford to retire. As many as 16.9 million over-50s saw their cost of living go up in June compared to May.
Two in five are now spending less on food and other essentials in a bid to balance the books. Almost half (42 percent) say they will not be able to save any money in the next 12 months.
More than two-thirds of those aged 70-plus – some 5.8 million – have experienced an increase in their cost of living compared with a month ago. And 19 percent of the over-70s and 49 percent of 50 to 69-year-olds are struggling to pay their rent or mortgage. Not surprisingly, pensioners on very low fixed incomes are among the worst affected.
But so too are the estimated 450,000 pensioners with an income up to 10 percent higher than the Pension Credit qualification threshold. This means they miss out on lower council tax, a free TV licence if they are old enough and other benefits.
Age UK is calling on the Government to act now and reduce energy costs. It would like to see the introduction of a social tariff – a discounted energy deal – for disabled people, unpaid carers and those on lower incomes.
It also wants to see a prepayment meter amnesty to give all households with a meter the opportunity to have it uninstalled and receive adequate compensation. The Age UK report follows recent data showing more than a million pensioners will still be saddled with expensive mortgage payments in retirement.
As many as 1.45 million homeowners with a mortgage think they will be older than 65 by the time they have paid down their home loan. Almost one in 10 expect to be 70 or older – or never pay it off at all, found the Hargreaves Lansdown poll of 2,000 older mortgage payers.
Among those aged 55-plus who still had a mortgage, one in five expected to offload it over the age of 70, while seven per cent admitted they would never be able to repay the full amount. Dean Butler, of finance company Standard Life, said: “Those who were planning to retire in the near future but still have mortgages or other debts face a tricky decision as the cost of borrowing continues to rise.
“The state pension by itself isn’t enough for a comfortable retirement, even without housing costs or other debts. And many don’t have enough saved in private pensions to bridge the gap.”
- Older people, their families and friends looking for support should visit ageuk.org.uk/support or call the Age UK advice line on 0800 169 65 65.