Pensioners increasingly in debt

Despite the credit crunch, borrowing levels have continued to rise and debt levels are increasing with the over-55s being the worst offenders, according to financial experts.

Research from Callcredit reveals that the elderly are the most uncertain about their future with 16 per cent of respondents over-55 financially unaware and unable to define their debt levels.

As a result the pensions gap is continuing to increase, claim the organisation.

Mark Ward, consumer debt expert at Callcredit, said: “It is essential that people start to borrow more carefully in order to avoid having to owe more than we are able to pay back.”

Over 1.5 million of those aged 55 and over claim they can’t afford to retire at state retirement age due to a lack of pension savings.

Another 1.1 million retired homeowners in the UK have outstanding mortgage on their home, with an average debt of £38,000.

Callcredit is a consumer credit reference agency and forms part of the Skipton Information group.

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Brits choose ’stability’ when renewing mortgages

Millions of Brits would opt to fix their mortgage rate for five or more years if they needed to renew it, it has emerged.

Recent research by Abbey Mortgages has revealed that one in three (5.1 million) homeowners would choose a fixed rate of interest, with the need to know monthly outgoings the main reason for doing so.

The number of people wanting to opt for a five year fixed rate was greater even that the once favourite two-year fixes.

Head of mortgages at Abbey, Nici Audhlam-Gardiner, commented: “You never know what’s going to happen in the future, but at least if you’ve committed to a long term fixed deal, you know where you are going to stand with your repayments.

“Borrowers need to be sure however that the deal they take out is right for them and that they understand the different types of mortgages available before signing up to anything.”

Meanwhile, the number of homeowners choosing tracker mortgages was up to 12 per cent, although around eight per cent of respondents said they prefer to fix as they do not fully understand how tracker mortgages work.

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Many rely on credit in lead up to Christmas

People struggling to finance their purchases in the festive season will not think twice about relying on credit, AWD Chase de Vere said yesterday.

Susan Hannums, savings manager at the independent financial advisers, explained that it is the “norm” for a lot of people at this time of year.

She said: “The spending and the mortgage rates are going up … there’s a lot happening, and it’s a very worrying time. But the message really is that you’ve got to forward plan.

“We’ve got to get into the savings habit and get away from using credit cards day to day really.”

Furthermore, she said, people with young children will want to make it the “best Christmas possible”, but it is good to try to be “imaginative” and make savings on presents for friends and other members of the family without “splashing out”.

Research from Credit Action earlier this year showed that personal debt in the UK is rising by £1 million every four minutes. The average amount owed by every adult in Britain is a staggering £27,180 (including mortgages).

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