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Over-55s Hit Hardest By the Credit Crunch

The Skipton Building Society has warned that older people are the biggest victims of debt caused by the ongoing credit crunch.

The first part of the building society’s Credit Crunch Britain report found that 80 per cent of over-55s have had to make financial cutbacks directly due to the credit crisis.

This age group has had to make cutbacks due to higher mortgages and rents and soaring utility bills. However, the Skipton also warned that over two thirds of all over-16s are admitting to similar economies.

Skipton Building Society managing director, Steve Haggerty said: "It is clear that the credit crunch is having a marked impact on UK consumers' spending.”

Mr Haggerty predicted that “the credit crunch will ease in the short-term — making mortgages cheaper and more available”, but he warned that “the wider, global issues, such as oil prices, will continue to create pressures on the pockets of UK consumers for some time to come”.

His company’s research found that across Britain, Scottish consumers were the least affected by the credit crunch, with only 54 per cent of over-16s in Scotland making financial cutbacks, compared to around 66 per cent across the UK.

"The fact that around a half of Scots have not cut back on their spending at all suggests either they are financially strong or they see the current economic climate as short-term," commented Mr Haggerty.

Women were reacting more strongly to the situation than men, with 62 per cent of women reducing their outgoing expenses, compared to 52 per cent of their male counterparts.

The credit crunch hit Britain’s consumers in early 2007, when financial institutions became more wary of lending to each other, reducing liquidity in the market.

This has caused mortgage payments and rents to shoot up, alongside shrinking of the credit market, affecting levels of secured loans, IVAs, trust deeds, and remortgaging.

Trust Deed News posted on 20 June 2008

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