Debt for the over 50s

Pobby

I read recently that the early 50s age group accounts for some of the biggest borrowers.I wonder why.Any ideas?

rog2

Probably because when we were in our thirties/fourties we were attractive propositions for lenders. Many of us aimed to be mortgage free by the age of 45, and a lot of us had disposable income, which we spent on things we could not afford at 25. Also many of us in that age group have had to borrow to fund things like children's uni, weddings and so on.

Pobby

Rog2,agreed about the uni bit and weddings.{How anyone xan blow over £10k on a wedding beats me}.However I am in that age group and I don`t remember anyone borrowing at 25!That was the 70s and it was very difficult to borrow money{oh, happy days}.We had to jump through hoops just to get a mortgage.My guess is the borrowings came much later.I have seen it in my own family,nice cars ect.

EdInvestor

It's probably because they can. That is, they have large houses with plenty of equity in them as they bought years ago when house prices were much lower.

Combine that with the pension problems, endowment problems, need for income due to early unexpected redundancy, and you can see why they might have felt the need to access the equity and/or max out their credit cards so as to pay living costs or invest elsewhere (eg in a BTL) to replace an underperforming pension.

rog2

EdInvestor wrote:

It's probably because they can. That is, they have large houses with plenty of equity in them as they bought years ago when house prices were much lower.

Combine that with the pension problems, endowment problems, need for income due to early unexpected redundancy, and you can see why they might have felt the need to access the equity and/or max out their credit cards so as to pay living costs or invest elsewhere (eg in a BTL) to replace an underperforming pension.

Agree totally with this. We had a low mortgage (bought house in 1977) and it was so easy to get loans, due to high equity - If we wanted something, we bought it!

seven-day-weekend

I went back to work full-time in my mid 40s. We had paid off our mortgage and had no other debts. We had an extra salary and nothing to spend it on! So we bought a BTL on a mortgage in our late 40s.

Then in our early 50s we took out a £10k loan to renovate our house in Spain.

We've now in our mid-50s taken early retirement, so sold the investment property and are debt and mortgage-free again, with money in the bank.

Why did we take out the mortgage/loan? Because we could, as someone above has said, and also the investment property has provided a lump sum for our future as its value had increased by 2/3 in the time we owned it.