Qualified advisers answering your
Financial Questions
call 0800 092 1245

Bankruptcy among pensioners sharply rises


Pensioners in Britain are now more likely to go bankrupt than they were at the height of the recession, even though overall bankruptcy figures have gone down.

Due to rising costs and low incomes, accountancy firm Moore Stephens have found that 5,672 pensioners went bankrupt in 2013, up from 4,727 at the height of the recession. There has been a 25% fall in the overall number of personal insolvencies, from 134,053 to 100,389, over the same period. This means pensioners now make up 6% of all personal insolvencies, up from 3.6% in 2009.

As well as facing rising costs on food, energy bills, fuel and healthcare, pensioners have been hit with the Bank of England base rate driving down bank account interest rates and reduced annuity rates. In 2009, typical annuity rates were 7%, in 2013 they decreased to around 5.7%.
A longer lifespan means annuity rates are reduced over the longer term and inheritances are now being passed down to children later in their lives than ever before.

David Elliot, partner in the restructuring and insolvency team at Moor Stephens, said recent retirees are struggling more than most to exit the recession. He said “An improving economy helps those in work, but it brings fewer benefits for those who have already retired and are locked into low annuity payments.

Pensioners are being hit by a combination of low annuity rates and low interest on bank accounts – and the result is that incomes will be much lower than a lot of them expected when planning their retirement. That makes it challenging to pay off debts from unsecured loans, credit cards and other high interest forms of debt taken out by those who have retired recently.”
Government proposals to liberalise pension arrangements may only further this problem, if individuals make the wrong decision on how to invest their pension pot.

Need financial advice?

If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details