Everyone’s circumstances are different, so there’s no ‘one size fits all’ position when it comes to how much debt the over 50s have.
However, from a general perspective, those aged 50 and over are more likely to own their own home and tend to have fewer personal loans for things like cars and other large purchases. The types of debt they might struggle to stay on top of therefore may be things like utility or credit card bills, or their mortgage if they are still paying it off.
While this might be the case for the majority of people in their 50s and beyond, many face the same financial challenges as younger generations, especially if they are renting. Sue Anderson of StepChange said: “What we’ve also got is this cohort of people in their 50s who might have very similar characteristics to those in younger age ranges, particularly for people who aren’t homeowners. With this group, it’s likely that they are subject to a lot of the same vulnerabilities, as those in their 20s or 30s.”
One of the biggest misconceptions is that problem debt is caused by poor financial management or habitual overspending. The reality is that while someone’s financial resilience (their ability to cope with changes to their finances) might be affected by the way they manage their money, the biggest reason people find themselves with problem debts is because of unexpected life events, also known as life shocks. These might include redundancy, a relationship breakdown, the death of a loved one or an unexpected illness.
While it may not be something you want to think about, unfortunately, it’s likely that many of us will experience at least one of these unexpected life events in our 50s, 60s or 70s.
Sue continues: “One of the things we know is that when you have a life shock, it’s a real trigger for debt, and the more of them you have in a short time period, the bigger the trigger is likely to be.
“While it’s not fun to think about, statistically, these things are more likely to happen as you get older, but it is something you can plan for, and start building your financial resilience.
“However, if you have found yourself in the midst of a shock, without any buffer, we encourage you to take advice early. There is a tendency across all age groups to not reach out until they’ve reached a point of desperation, but the advice across all charities is that the sooner you turn to them, the sooner they can help.”