Press Release

BURDEN OF DEBT SHIFTS TO THE OLDIES

20 March 2007

 

Last year debt problems of the over 60s accelerated faster than for any other age group while contrary to popular perception, the debts of young people declined, according to CCCS’ Statistical Yearbook 2006 published today (March 20). 

 

CCCS predicts that by the end of 2007 its counsellors will be helping more people over 60 than under 25.

 

 

 

Source:  CCCS Statistical Yearbook 2006

 

Such is the volume of information available to CCCS, which is responsible for managing 10 percent of the UK’s problem debt, that the statistical trends identified in its Yearbook are likely to be indicative of the over-indebted population as a whole.

 

 

 

The main findings are:

 

-          People with debt problems are getting older: almost 50 percent are aged over 40; those aged 40 to 59 have the highest levels of debt, last year owing an average of £32,886 while the average for the over 60s was £31, 867.

 

-     Although the absolute number of young people seeking help is still rising, the proportion is declining as is the amount owed.  Last year clients aged 18-24 accounted for nine percent of the CCCS population, down from 11 percent in 2005 and 13 percent in 2004. The average debt for the under 25s fell by 15 percent to £12,790 from over £15,000 in 2005.

 

-          Levels of “extreme” [1] debt fell in 2006: the proportion of clients who owe more than £100,000 to their creditors dropped to 2.5 percent from 2.7 percent in 2005. However, the proportion of clients with a debt to income ratio of more than 66:1 increased to 4.2 percent in 2006, up 0.6 percent on 2005.

 

-          Over half of CCCS clients who were recommended bankruptcy did

not go through with it, one third citing stigma as the reason. Had they done so, the bankruptcy figures in England and Wales would have risen by around 14 percent.

 

-          Sixty percent of clients rent their accommodation.

 

Volumes of calls to CCCS helplines increased by 50 percent to almost 300,000 in 2006. Over 73,000 people received extensive counselling through one of the ten centres covering the UK.

 

Notwithstanding the increase in demand on CCCS services, in the wider world unsecured household lending slowed considerably in 2006, remaining almost static over the course of the year while credit card balances contracted significantly.

 

Commenting on the past year, Malcolm Hurlston, chairman of CCCS said:

 

“For the last few years, credit cards have been castigated for turning us into a nation of debtors but I wonder.  With house-prices continuing to rise, matched by steep rises in mortgages and secured lending, I fear for the financial health of those stretching themselves ever further to step on to the housing ladder.  Recent events in the US have shown us that owning a home at any cost is by no means the right financial decision for everyone.

 

“At the other end of the spectrum the increasing levels of debt among the over-60s has been a marked trend for the past 18 months and shows every sign of increasing.  We are watching it with care.”

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