It’s not uncommon for older people to find themselves faced with debt that they can’t afford to repay. And, with retirement around the corner, this can be a major financial issue.
But, if you find yourself in this situation, there are steps that can be taken to improve your finances.
How is debt affecting older people?
Coping with debt at any age can be challenging. But, as an older person who might be working less hours, or even about to head into retirement, debt can have a huge impact.
If you’re experiencing large amounts of debt, your lifestyle might be affected in various way. You might have to severely cut costs or rely on others to make ends meet. In extreme situations, debt can cause marriages to breakdown, leading to further financial problems.
Often, money worries can result in delaying retirement, or even having to return to work, leaving less time to spend with family and loved ones. And it’s not difficult to see how money issues can be a problem in the over 50s, with rising costs and high inflation.
What are the main reasons for debt in the over 50s?
There can be multiple reasons why an older person might find themselves with large amounts off debt. Life events such as redundancies, ill-health resulting in time off work and divorce can all contribute to money issues.
Those who took mortgages out later in life might find themselves facing higher payments due to recent interest rate hikes. Similarly, high energy costs andhaving dependents living at home can also increase outgoings and can lead to more debt.
How can debt be reduced?
It’s a good idea to look at ways in which to reduce debt, particularly any high interest loans. The first step is to create a workable budget, taking into account all your outgoings. Once you know what you’re left with each month it’s easier to stick to a plan.
Focus on repaying the larger debts first.You might want to consider taking out a debt consolidation loan if you have multiple repayments to make.
Reduce non-essential spending such as luxury trips away, evenings out or subscriptions. Make easy swaps on your weekly food shop to cut down your bill. Another good idea is to shop around for insurance, utilities and everyday items.
If your dependents are still living at home and they have the means, ensure they‘re contributing to household bills and groceries to reduce the financial burden.
Finally, it’s important to communicate with your family and be honest about any debt problems you’re facing. If you find yourself continuing to struggle or you can’t afford your day-to-day living costs, it’s vital to seek expert debt advice.
