A friend of mine – she’s about my age – has just paid off her mortgage. It’s a great feeling when you know that your house really is all yours. I don’t have debt – frankly, I can’t afford to: after all, I would have to repay it. But apparently, my friend and I are bucking the trend. A report from Saga says that more than half of the over 50s say debt is just part of modern life.
And here’s the worrying bit. It says that a third of this age group said they would borrow money to pay for a big expense so they can keep their savings for emergencies. What madness is that? I know personal borrowing rates are low at the moment but they are miles above savings rates. The lowest personal loan rate I can find is 2.8% and the top variable rate on savings is 1.1%. There’s no logic in borrowing when it costs double what you’d get on your savings. The report – which is by Saga Loans, which sells personal loans to the over-fifties with a flat rate of 7.9% – does say more than two-thirds would use savings for expenses. So most of the over-fifties are sensible.
Yet one in five apparently is happy to use credit to fund their lifestyles. And apparently, those in their fifties are happier to borrow money than those in their seventies. Whether we’re baby boomers or Generation X-ers many of us in our fifties seem happy to splash someone else’s (ie the credit card/personal loan company’s) cash.
Neatly, I could have the answer. In a rare incidence of perfect timing, a release pinged into my inbox publicising English Wine Week. It says that those aged between 50 and 64 spend £1.87 billion on wine every year – that’s £265 a year each, more than double that spent by the under-thirties and much more than the 30-49 year olds. So either the fifty-somethings are in hock buying their Hock – or they are so p***ed they throw caution to the wind and bung everything on the credit card. Not sensible: but whose party would you rather go to? A sober, vegan, no fun soiree with a bunch of twenty-year olds – or a riotous gathering of sod-it all fifty-year olds? No contest.