Credit Card Debt – Over 55’s

I was speaking with someone the other week about Lifetime Mortgages and he mentioned those in retirement who are unfortunate enough to be taking their credit card debt with them in retirement and that the cost of this is debt is quite a considerable drain on their reduced income.

He made what I thought was a valid view and that not only are these debts often in the tens of thousands but also just how high the interest rates are on credit cards at anything up to 30%pa and in some cases even higher.

He did not understand why those who are retired, living in their own home wasn’t using equity release in their droves to repay these credit card debts off, especially when you consider the low-interest rates available on a Lifetime Mortgage product these days.

• February 2020, the UK’s credit card debt £67.9 billion *
• In July 2019, there were 61.9 million credit cards issued to UK residents *
• Average interest rate February 2019 18.7% *

With credit cards charging anything up to 30% and beyond and equity release products averaging around 4% and in some cases even lower rates being available, why wouldn’t a homeowner over 55 consider finding out about different solutions and the possibility of equity release as a possible solution for them, allowing them to change things so they can either make no payments and let the interest roll-up or to service it by making payments?

Either way, buy opting for a Lifetime Mortgage as a solution, those in retirement can either eliminate the monthly payment or reduce it greatly.

*Chris Lilly, publisher at Finders.com, Jul 17, 2020

For more information about your equity release options, please contact Chris at Blue House Equity Release today

**Remember that if you are in receipt of means-tested benefits, releasing equity may affect your entitlement. Fortunately, there is a range of plans available to help you manage the impact of a lifetime mortgage. You should seek professional advice on the best option to suit your needs and ask an adviser for a personalised illustration to ensure you understand all the features and risks.