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While problems with debt are becoming more and more widespread there is concern among debt charities that it is disproportionately effecting the over 55’s. Nearly a quarter of over-55s with debt over £10,000 have said that they are “quite likely” or “certain” to go insolvent. This is compared to the one in 10 of 18 to 24-year-olds, with more than £10,000 debt, who say they will go insolvent.

This research, from the Consumer Credit Counselling Services (CCCS), echoes earlier findings that older people are struggling more with debt than younger people.The CCCS says there has been a rise in the number of elderly people asking for help, with men over 60 owing the most. Reasons for the greater concern among older people are thought to include a lack of understanding of the options available, particularly the Individual Voluntary Arrangements (IVA’s) that are now a common place alternative to bankruptcy.The CCCS also states that a stigma remains among older generations about discussing or even recognising that rising debt is becoming problem debt. Community workers say that debt is a taboo topic for elderly people, and they will keep their money problems secret even from their closest loved ones.

To demonstrate the seriousness of the problem the CCCS has pointed to a surge of suicides among elderly Japanese people during 2007. These were linked to levels of debt in a society where serious financial problems are a source of shame.Incredibly, the average debt for pensioners who call a national debt helpline is £31,000, yet a third of all pensioners live on less than £7,500 a year.

Despite this, like the rest of the population, credit card ownership has steadily grown over recent years. More and more old people are reliant on credit to make ends meet and it can easily spiral out of control. It is also the elderly who are the most vulnerable when it comes to scams and frauds. Debt charities are urging people with elderly relatives who they suspect may be in trouble with debt to talk to them about the subject openly. An additional obstacle is the elderly are less likely to be accepted for debt consolidation loans due to their age. Catching the debt problem early will make it much easier to solve, and in the process, the stigma around financial difficulties will be removed.

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Returning to a topic I have covered before on this blog, debt advice groups have this week renewed their call for action against payday loans and their extortionate interest rates.

For those who have not been paying attention, payday loans typically involve a lender advancing a customer cash, usually for a month, against a post-dated cheque. The Office of Fair Trading (OFT) has said they would are covered by investigations of the issue of responsible lending.

Although the loans, often used by people to tide themselves over until they get their wages, generally attract high rates of interest, the businesses offering them are properly licensed and claim to be professional and responsible.

The companies claim that the high interest rates simply reflect the risk involved. American companies own many loan shops, and hundreds have opened in the UK after some state authorities capped the rates they could charge in the US. There is discussion that similar action needs to be taken here to stop vulnerable people being abused.

Normally I would not advocate such intervention in a market but it is clear that market forces are failing in this case. Some of the loan companies have lent money at a rate equivalent to almost 2,000% annually.

The actual rate involved is usually hidden by using monthly rates that appear much lower.

National Debtline, a helpline for those in debt, said that the credit crunch meant that people were looking at alternative forms of borrowing. If they can’t get another credit card balance transfer, they will start to look at other forms of borrowing, which could be payday loans or pawnbroking, which are quite expensive.

With the OFT making advances with its work against unfair bank charges it seems that it is right to begin to take payday loans seriously and stop these companies ripping off consumers.