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11 June 2013

Having debts increases divorce rate for older couples

Elderly couples who struggle with debt are more than twice as likely to suffer marriage breakdown than those whose finances are steady, the BBC reports that new research suggests.

Old people can be as harmed by debt as younger groups, argues the Age-UK and International Longevity Centre study.

Retired people's budgets have been squeezed by high energy prices and poor returns on savings and investments, say the authors.

More debt advice is needed for old people in England, they argue.

The report focuses on unsecured debt, for example credit cards, mail order bills, hire purchase agreements and money borrowed from lenders.

The authors found "a statistically significant decrease in quality of life", among those whose debts became a problem, adding that they were more than twice as likely to experience partnership breakdown as those who stayed in control of their finances.

"This pattern was not found among those who entered unsecured credit arrangements but were not in problem debt. This suggests that problem debts could have contributed to the breakdown," says the study.
Overall, the analysis found that the while vast majority of older people either did not have unsecured debts or were managing them well, a growing proportion of those with unsecured debts were finding them a problem.
In 2010 some 28% of people aged over 50 with debts were struggling to pay them off, up from 23% in 2002, says the report.

The authors define people as being in problem debt if they spend more than 10% of their income on repaying it if they are very poor - or 25% if they are wealthy.

During the period 2002 to 2010 the proportion of over-50s with problem debts fell slightly from 6.5% to 5.9%, says the study.

Overall debt levels also fell for this age group with the numbers of over-50s reporting that they had no debt at all rising from 57.8% in 2002 to 67.6% in 2010.

Read more on this story here.