debt news

The UK’s debt problems could see the retirement age pushed up to 70, a new report by PriceWaterhouseCoopers (PWC) has suggested.

Poor public finances and an ageing, longer living, population will be to blame for the rise in the state pension age the report by one of the UK’s leading consultancies said.

New research from insurer Aviva has shown that two fifths of ‘pre-retirement’ people aged 55 and over, are failing to accrue any savings and entering retirement with substantial debt problems.

Non- mortgage debts do not tend to be a problem for the pre-retirement group and the average household does not tend to enter retirement with debts from credit cards, overdrafts or loans.

The free debt advice service offered by the government is unable to cope with the 28% rise in queries from people struggling with debt problems, a new survey has shown.

The recession has seen the number of people seeking debt advice soar in recent months, and research has suggested that one in ten people are having problems with payments on their loans and credit cards.

Experts have warned that the Government’s mounting debt problems render a VAT increase to 20 percent “inevitable” after the General Election.

According to analysts at consultancy Oxford Economics the Treasury will need to raise the tax rate, which is levied on all goods and services in the UK, to 20% in order to raise an extra £12 billion a year.

It is also possible that the retirement age will be put up to 68 in order to cope with the consequences of the economic crisis. Plans to increase the retirement age are already in place.

Housing charities have called on the government to provide help to low income tenants who are struggling with debt problems.

Figures from research by charities Shelter and the Money Advice Trust said that 90 percent of low income households, earning £20,000 or less a year were struggling with their finances, a 34 percent increase since 2006.