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Debt agencies are witnessing growth in the number of older persons seeking advice about their debts. In this Trust Deed Scotland Forum blog we look into whether this is likely to become a longer-term trend, the reasons behind the recent increase, and the options open to persons in retirement when debt payments are no longer affordable.
In the past twenty years there has been dramatic growth in the availability of many types of credit. For many people this will be considered to be a positive thing as it has allowed them to purchase homes (or other important goods and services) that might otherwise have been out of their reach. Nonetheless, borrowed money must be repaid and for some people their plans for repayment are disrupted by events that they did not predict.
Not everyone who is currently in retirement wishes that this were the case. It isn’t uncommon for enquirers to the Trust Deed Scotland Forum advice team to mention that they had hoped to work on for longer than has turned out to be the case. This in turn has spoiled plans to repay debts prior to retirement.
Several reasons for this exist. In better economic periods many employers are happy to allow people to work beyond the standard retirement age so long as they are in good health. Some people seem to have relied upon the fact that this will apply to them. In more recent times lots of employers have stepped back from this policy in an attempt to reduce their employee numbers and therefore their costs. The Trust Deed Scotland Forum team have also heard from people that have suffered unexpected redundancy late in their careers who have found it impossible to find suitable new work. Another factor at work can be forced retirement following ill-health.
Trust Deed Scotland Forum employees are also seeing the disposable income of retired persons being squeezed by increases in basic costs for gas and electricity amongst other things. When living on a fixed retirement income such increases can be especially financially painful and make existing debt repayments unaffordable.
So will a Scottish trust deed prove to be an appropriate solution for retired persons who are struggling with their debts? Quite often it will not be, but no individual should come to this conclusion without first taking professional advice. The primary reason for this statement is that a trust deed in Scotland must (usually) be funded from surplus income. Typically retired persons are living on incomes that don’t offer much surplus which may mean that this type of contributory debt solution isn’t appropriate. However, those with private pension income (or access to savings or another type of lump sum) may still find that a Scottish trust deed would work for them.
The Trust Deed Scotland Forum team also often discovers that retired enquirers who are homeowners have built up significant amounts of equity in their homes. Where this is the case a trust deed may become an unattractive option unless the individual is prepared to sell the home or has the means to otherwise access a lump sum equivalent to the value of the equity.
The fact that a trust deed may not be the right debt solution for many persons in retirement should not discourage them from seeking out high quality debt advice. Whether it’s from you local CAB, your Local Authority Money Advice team, a firm of insolvency practitioners, or our own Trust Deed Scotland Forum advice team, good advice on your debts will help you to find a way to deal with thems in a way which is affordable and manageable.
If you are retired and are looking to get extra advice you may wish to visit our actual Trust Deed Scotland Forum itself. A range of experts will review your questions and offer information and advice to assist you to deal with your debt concerns.Tags: trust deed scotland forum