Friday, March 16, 2012

Debt and the older consumer

Lots of older people are well placed for their retirement - lots are not. As a marketer, you need to know the good and the bad news.

A couple of worrying items of news. According to the Consumer Credit Counselling Service the  demand for advice among the over-60s has increased by 15% during the last three years.

This is bad news but this is far more worrying.

Of the 11.2million mortgages in Britain about 40% are interest-only.

Yesterday a director of the Financial Services Authority, raised his fears about interest-only mortgages which are coming to the end of their life – but the homeowners have no money to pay off the loan.

Between 2011 and 2020, the FSA expects about 1.5million such mortgages – worth a staggering £120billion – will be due for repayment. The FSA representative said: "There is a ticking timebomb that has been created over the last 20 years.’ 

The FSA said its figures mean 150,000 interest-only mortgages will come to the end of their life every year for the next decade." Not good. Dick Stroud

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