Credit levels are on the increase across all age groups and Help the Aged is concerned about the impact this will have on pensioner poverty as new retirees face the double whammy of living on a fixed income while managing existing credit commitments. The report shows that unlike borrowers in other age groups, older people use credit cards to cover essentials such as the costs of bills or even to buy food.

Key outcomes of the report include:

• credit users in their late 50s and early 60s owe on average at least four times as much in unsecured credit as their counterparts did a decade ago;
• a quarter of all people approaching state pension age have outstanding consumer credit commitments.  Outstanding credit commitments increase the risk of financial difficulties by 26 times;
• levels of credit use may already be forcing people to delay the timing of retirement;
• half of households headed by someone in their 50s, one in eight over 60s (over 1.5 million) and 4% of people aged 80-84s (about 60,000) are still repaying a mortgage; and
• arrears on credit commitments are most common among people in their 50s and 60, but among those aged 70 or over, utility bills are the main area of financial difficulty.

The research was commissioned from the Personal Finance Research Centre at Bristol University to support the work of a nationwide money management programme, called Your Money Matters, run by Help the Aged in partnership with Barclays. The programme offers older people free and impartial money management and debt advice.

The report shows that unlike borrowers in other age groups, older people use credit cards to cover essentials such as the costs of bills or even to buy food.

David Sinclair, Help the Aged head of policy said: 'This report shows that there are some worrying trends in credit usage that could represent a debt crisis for those coming up to retirement.  We know from working with older people suffering from chronic debt problems that even owing a relatively small amount of money can cause untold misery for those living on a fixed income.

'Government support for services that promote financial education and tackle bad debt are the key to defusing this ticking time bomb. Help the Aged recommends that the Government also introduce automatic payments of benefits to those who may be eligible and a radical overhaul of the Social Fund.'

Read more about Your Money Matters programme