Low interest rates sending more pensioners bust
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Older people are being hardest hit by the long period of record low interest rates, with four times as many becoming insolvent than the average.
Shock new figures published today reveal that twice as many pensioners went bust last year compared with five years earlier. Over the same time period, the insolvency rate in age groups under 35 fell. Meanwhile, recent research by the debt charity Consumer Credit Counselling Service found that the number of pensioners with unmanageable debt doubled in the past five years.
"Pensioners have been caught in a vice between high inflation and the Bank of England's low interest rates," said Keith Stevens, a partner at Wilkins Kennedy, which examined the official insolvency figures. "Low interest rates and quantitative easing have eaten away at pensioners' sources of income, while persistently high inflation has really hurt pensioners on fixed incomes."
Some 5,749 pensioners became insolvent last year, more than double the 2,725 who became insolvent in 2006.
However most of the surge happened from 2009 onwards. In 2008 pensioner insolvencies were just a fifth higher than the 2006 figure. But by 2011, pensioner insolvencies were three-quarters higher than in 2008.
Mr Stevens said: "Traditional investment vehicles are offering almost no return, especially once you take inflation into account. Today's pensioners haven't had the cushion that previous generations of pensioners had."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments