Over-55s are expected to borrow £22bn more in 2022 than last year, according to new research from equity release lender more2life and economics consultancy Cebr.

The research reveals that the total amount of debt owed by the over-55s will rise to £294bn this year, up from £272bn in 2021 and £209bn in 2017. This is an increase of 41% in five years and the total is set to rise even further over the next decade, to £402bn by 2032. This is a significant rise of 92% in just 15 years.

Most of this debt is held by younger retirees aged 55-64 who are typically still working while repaying mortgages and supporting children. Total debt held by this group is expected to rise from £196bn last year to £210bn in 2022. 50% of 55–64-year-olds say that they are currently in debt or have been in the past five years, equating to 4.4m people.

Unsecured debt amongst the over-55s grew rapidly from less than £20bn in 2015 to over £25bn in 2019 but contracted slightly over 2020-2021 as spending reduced during the pandemic. However, unsecured debt is expected to rise by over a third (34%) in 2022, reaching £20bn, as the cost-of-living drives many to borrow to make ends meet. Currently, almost 40% of retirees have spent more than they receive in income in some months in 2022 (with 8% saying this often or always happens), which will likely only rise further as this debt level increases.

Again, those aged 55-64 are most likely to have larger unsecured debt levels in 2022, with the average credit card debt of those with debt standing at £2,800. Other types of unsecured debt levels are expected to average £10,700 per individual with debt. Higher interest rates are unlikely to deter this rise in unsecured borrowing in the short term, but by the next decade should see the total amount plateau at £19bn.

22% of over-55s revealed that they had credit card debt in the past five years which they had not paid off in full each month, equating to 4.7m people. The second most common type of debt was an overdraft, with 9% (1.9m people) noting that they had used this solution over the same period.

Dave Harris, CEO at more2life, said: “Debt, whether it be a mortgage or credit card debt, is a fact of life for many people and allows them to achieve goals such as homeownership. However, with 40% of retirees already finding that their monthly outgoings outweigh their income, it is likely to quickly become a burden for some as the cost-of-living crisis continues.

“Over-55s are expected to borrow £22 billion more than they did last year which is likely to be driven by higher interest rates and rising inflation. Servicing this borrowing will have an impact on those older people who are already on fixed incomes and may be providing some financial support for their families.

“While individuals need to consider how best to manage their own finances as they get older, it is vital that they consider all their assets. Living in a property you own but being too scared to turn the heating on and dreading a visit to the supermarket makes no sense at all.

“Specialist advisers are ideally placed to help people explore all their options and understand whether a later life lending product such as equity release might be the support they need.”