Scotland’s over-55s struggling to tackle debt problems

One in four Scots aged over 55 has a mortgage still to clear, according to the latest Real Retirement report by insurer Aviva, although the average mortgage debt of £47,498 is lower than the UK average of almost £54,000.

Almost half of over-55s in Scotland with debts owe money on credit cards, while a sixth have personal loans to repay.

But onerous debts are not the only concern for older Scots, with more than 70 per cent identifying inflation as their biggest fear for the next five years. While most expect their living conditions to remain unchanged over the remainder of 2011, almost four in ten expect their standard of living to decline.

The erosion of savings as interest rates remain at a rock bottom is the next biggest worry. The research is published in the wake of last month’s inflation rise – to 4.5 per cent – and the withdrawal of the NS&I index-linked bonds following huge demand from frustrated savers.

The report also shed new light on income levels among older Scots. Over-55s in Scotland have an average monthly income of £1,388, compared with a UK average of £1,216. Yet although one in five Scots has income of more than £2,500 a month, 10 per cent have to get by on less than £500 a month, Aviva found.

And while 20 per cent of Scots over 55 have £100,000 or more in savings, a sixth have no savings at all and more than a third fail to save any money each month.

Clive Bolton, “at-retirement director” at Aviva, said: ““On one level, there are clearly a group who benefit from higher incomes and have more in savings. However, 16 per cent have nothing in savings, showing a disproportionate distribution of wealth.”

Those not saving are vulnerable to unexpected expenses, added Bolton. “Given that the price of residential care for a single person in Scotland is around £26,000 it is concerning that so many will have few resources to draw on. It is essential that over-55s start considering these costs as soon as possible,” he said.