Debt is, of course, related to the amount people choose to borrow, but these trends are set to alter due to changing financial circumstances. The effects of COVID-19, have, for many, been particularly difficult to reckon with. Job losses, furloughing, and general loss of income have all had a strong effect on the way people are able to manage their money.
These households are expected to owe £94,173, including their mortgage payments in 2021, compared to a 2019 average of £106,552.
And for an older age bracket, there are also debt victories which are likely to occur.
Those 75 and over who still have mortgage debts to pay will see this level reduce by £8,032 – from £67,007 in 2019, to £58,975 by 2021.
Dave Harris, More2Life CEO, commented on the findings of the organisation.
He said: “The coronavirus pandemic is having a huge impact on the way over 55s spend their money.
“The nationwide lockdown, coupled with the heightened economic uncertainty, has caused many retirees to become more cautious and rein in their spending on larger or discretionary goods.
“However, although we are expecting to see a short-term fall in borrowing by the over 55s, it is clear that this will not be a lasting trend.
“For those who are impacted financially and need to draw on extra funds, it is crucial that they are made aware of the solutions that can help them bridge this income gap.”
But as Mr Harris states, the drop in debt is not predicted to last for long.
As the UK returns to the status quo, it is expected borrowing will increase again.
In fact, the research estimates borrowing levels will reach a sizeable £300billion by 2030.
This shows particular acceleration of debt within the next ten years.
As debt continues to rise then, it is important for older generations to understand how they can manage their money, and of course, the best ways to eliminate this debt if it arises.