New research from equity release lender more2life has revealed an upward trend in borrowing by the UK’s over-55s, who are expected to borrow £22 billion more in 2022 than last year.
According to the new report, which is a collaboration between more2life and the Centre for Economics and Business Research (Cebr), the total amount of debt owed by over-55s will rise to £294 billion this year, up from £272 billion in 2021 and £209 billion in 2017.
This means that debt among older UK adults has increased by 41% in five years, with this figure expected to soar even further over the next decade, to £402 billion by 2032.
If forecasts hit the spot, total debt for over-55s will rise by a whopping 92% in just 15 years.
more2life said most of this debt is held by younger retirees aged 55 to 64 who are typically still working while repaying mortgages and supporting children.
Total debt held by this group is expected to rise from £196 billion last year to £210 billion in 2022. Unsurprisingly, 50% of 55- to 64-year-olds said that they are currently in debt or have been in the past five years.
The research also found that while unsecured debt among the over-55s grew rapidly from less than £20 billion in 2015 to over £25 billion in 2019, it contracted slightly over 2020 to 2021 as spending reduced during the pandemic.
However, unsecured debt is expected to rise by 34% in 2022, reaching £20 billion, as the cost-of-living drives many to borrow to make ends meet.
Currently, almost 40% of retirees have spent more than they receive in income in some months in 2022, which will likely only rise further as this debt level increases.
Those aged 55 to 64 are most likely to have larger unsecured debt levels in 2022, with the average credit card debt of those with debt standing at £2,800. Other types of unsecured debt levels are expected to average £10,700 per individual with debt.