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Pensioners borrowing to boost income

One in five pensioners expect to borrow money, but one in eight over 55s have been turned down for credit during the last year, according to Key Retirement Solutions.

One in five pensioners have had to borrow money to boost retirement income, according to research commissioned by Key Retirement Solutions, but 12% of over 55s have been turned down for credit in the last year.

Key’s research indicates that as age increases the range of credit options available declines.

Credit card companies do not have age limits, but they may impose limitations based on income levels, which are likelier to affect pensioners. Mortgage lenders, however, do have age limits on loans.

Many people nearing retirement fear they will not be debt-free by the time they retire, with 27% of over 55s expecting to still have debts (excluding mortgages) when they retire.

Dean Mirfin, Group Director at Key Retirement Solutions, described access to credit for the over 55s as a major issue, and that this was even more the case for those over 65.

Mirfin attributed this to the persistently high level of demand for credit from people as they age, coupled with the wariness of lenders, which leads to a higher chance of rejection.

He added that, although improvements in the economy are feeding through to pensioners, annuity rates remaining at low levels have kept retirement income under pressure.

Mirfin said that there was some hope for pensioners, particularly homeowners, who can stand to benefit substantially from the recovery in the housing market.

Those who are considering unlocking the value of their home in order to supplement their income in retirement should take professional advice on whether or not it is the right option for them and, if so, the best way to proceed.

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