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According to the ‘Redefining Retirement’ report by Old Mutual Wealth in the UK, 30% of retirees are still in debt and one in ten owe more than £100,000. Of the total 21% were still paying off a mortgage, according to the report.


While no comparable figures are available in Jersey, it would be surprising if they were any better off than the UK. In fact, because of affordability issues, Jersey homeowners are more likely to stretch themselves to be able to afford a mortgage on expensive property in the first place. Some will be lucky to pay off this mortgage by the time they retire, but many will not. According to another study in the UK, this will result in many more OAPs ending up in rented accommodation. If this is also the case in Jersey, then this will largely defeat the aim of the fairly new Long Term Care scheme introduced so that homeowners would not be forced to sell their homes to pay for care in their old age.


The elderly therefore suffer from many of the same financial problems as the rest of the community, and in some cases can suffer more than the rest of us.


Research carried out by the International Longevity Centre in the UK found that although the proportion of older people in debt has fallen this century, the amount of debt has increased substantially. In 2002, 23% of older people had unsecured debts which were considered problem debts. This rose to 28% in 2010.


An Age UK summary of that report pointed out: ‘Problem debt among older people is associated with self-employment, unemployment, depression, lower income, renting one’s home and being an owner occupier with a mortgage. In 2010 owner occupiers with a mortgage were five times as likely to be in problem debt as those without a mortgage.’


People who moved into marital debt, were also likely to experience a decreased quality of life, according to this research. ‘There was also evidence indicating that problem debt was linked to marital breakdown,’ the report said.


All of this is a long way from the comfortable retirement expected by most people when they reach 65. Many are able to arrange their financial affairs to ensure they can maintain a reasonable lifestyle after they finish work. The retirement age is also gradually being increased to 67 by 2031 and more people will keep on working as long as possible whether they want to or not. Financial literacy should improve over time, and this will undoubtedly be followed by financial institutions designing more products specifically for older people. There will also always be help and advice from charities and organisations such as the Citizens Advice Bureau.


However the problem of an ageing society is not just a problem for the Government to tackle. As the population ages so more people will have to become much more aware of the financial problems of growing old.


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