Those in retirement who seek help for their debts owe more money on credit cards, loans and in council tax debts than workers across all careers, according to new research from PayPlan.
Retirees seeking help from the debt advice service since the start of 2016 had average problem debts amounting to £19,897.
Bank, warehouse and retail managers follow close behind with average outstanding balances of £19,421, more than any other profession, despite likely higher salaries than many others.
Problem debts: Those in retirement owe the most at £19,897 according to PayPlan research
Nurses come next at £19,278, and administrative assistants working in IT, education and the medical and public sectors also feature high up the list at £15,663, among those who contacted PayPlan for help.
Despite much lower incomes unemployed Brits in contrast owe nearly £4,500 less than managers do, at £14,984.
Other workers to join the top ten list of the biggest problem debts include warehouse workers with an average £15,138, sales assistants at £13,811.
Care assistants and support workers in the medical, social care, and public sectors also featured – both owing more than £13,000, followed by cleaners at £12,515.
The research coincides with news that ten-years on, nearly half of the population (46 per cent) feel worse off than they did in before the credit crunch.
One in four in fact believe their finances wouldn’t hold up should there be another economic downturn with 24 per cent admitting to having no emergency fund, according to new figures from comparison site GoCompare.
TOP TEN MOST INDEBTED GROUPS
According to PayPlan, these groups of Brits owed the most in unsecured debt on average of any of the people using its debt management service since the start of 2016.
- Retirees – £19,897
- Managers – £19,421
- Nurses – £19,278
- Administrative Assistants – £15,663
- Warehouse Workers – £15,138
- Unemployed – £14,984
- Sales Assistants – £13,811
- Care Assistants – £13,190
- Support Workers – £13,149
- Cleaners – £12,515
According to Payplan, rising debt levels are down to several factors.
Workers are feeling the pinch thanks to stagnant wage growth, meaning their incomes are not stretching far enough to cover the increase in the cost of living.
The research from Go Compare supports this, with over half of people experiencing a worrying increase in living costs over the past decade.
To pile on more difficulty, a quarter of people claim their income has stalled completely or even fallen over the same period.
Many are therefore turning to credit because they don’t have a savings pot to act as a safety net to deal with unexpected costs.
The most common emergency expenses include illness, injury and even divorce, according to PayPlan.
|Ranking||Anxiety||Percentage of people|
|1||Rising household bills and living costs||55%|
|2||Inability to save money||30%|
|3||Not being able to prepare for retirement||22%|
|4 =||Lack of a secure future for the next generation||15%|
|4 =||Struggling to repay credit card and other unsecured debts||15%|
|6||Not being able to afford my mortgage/rent payments||11%|
Jane Clack, money advisor at PayPlan and chair of the Institute of Money Advisers explains: ‘It might be surprising to see that people from these groups, whose salary exceeds someone who is unemployed or on minimum wage, have such big debts.
‘Recently, we have heard stories about nurses having to take out loans and use food banks just to get by, with stagnant pay and the increasing cost of rent and bills being blamed.
‘People on a relatively healthy wage may also have been lulled into taking credit cards and loans before the financial crash and are still paying the price now.
‘Some may also be surprised to see retirees topping the list. These figures fly in the face of our belief that older people are financially secure. We might imagine they are living a comfortable life, having benefitted from final salary pensions and lower house prices – but that’s certainly not the case. Another compounding factor is low interest rates, which mean retirees are seeing a poor return on their savings, if they have them at all.’
Unexpected costs: Many are borrowing because they don’t have a savings pot to act as a safety net to deal with unexpected costs
According to the research from GoCompare, 38 per cent of those polled believe that the UK hasn’t learned a lesson from the credit crunch
And a third blame easy credit from banks and lenders for encouraging people to spend money they don’t have.
Record low interest rates have driven down the cost of borrowing since the financial crisis, unsecured loan rates are at all-time lows of 2.8 per cent, and 0 per cent interest deals on credit cards last longer than ever at up to 43 months.
0 per cent interest cards in particular have been highlighted by some as an issue as some borrowers take on debts but do not clear them before the interest-free period ends.
According to a recent report a quarter of borrowers take out loans worth £5,000 more than they earn in a year.
The banks however have now signalled that they expect to tighten their lending in the coming months.
This could mean shorter zero per cent interest deals, fewer low-deposit mortgages and more stringent credit checks, according to the latest credit condition survey by the Bank of England.
WHERE TO FIND HELP WITH YOUR PROBLEM DEBT
There are a whole host of debt charities out there which offer impartial advice for free.
This is Money also has a helpful guide to getting your finances back on track and dealing with debt if you are worried you could be slipping into debt problems
Credit Card Reality Check Calculator
Warning: This calculator does not factor in the time it would take to repay a credit card debt where the minimum payment is calculated as a percentage.