More and more seniors are struggling with their debts | Free Press

Neuss (dpa) – More and more elderly people in Germany are no longer able to pay their bills. Since 2013, the number of over-indebted consumers aged 70 and over has more than quadrupled, to around 470,000 people.

This is what the credit agency Creditreform reported in its “Debtor Atlas 2020”. For comparison: the total number of all over-indebted people increased “only” by about four percent in the same period.

In the past 12 months alone, the number of over-indebted seniors aged 70 and over increased by 23 percent, according to the study. At the same time, the number of over-indebtedness cases in the 60-69 age group increased by 13 percent to around 725,000. “The phenomenon of old-age over-indebtedness is gaining even more importance than in previous years,” warned Creditreform Boniversum Managing Director Michael Goy-Yun.

Creditreform is not alone in this evaluation. Germany’s food banks also report a growing need among older citizens. The number of older people who picked up groceries from food banks “increased alarmingly in just one year,” said German food bank president Jochen Brühl. In just 15 years, one in five pensioners could be at risk of poverty in old age.

According to experts, there are many reasons for increasing poverty in old age. On the one hand, according to previous information from Creditreform, here we can see the pension reforms of the last decades, almost all aimed at reducing the level of security of the regulatory pension. The growing number of unstable job histories and the growth of the low-wage sector also had an impact. The sometimes dramatic increase in rents also plays a role. However, cases of over-indebtedness remain much rarer among older people than among younger consumers.

However, poverty among the elderly is particularly acute, Creditreform experts stressed. While younger people often see poverty as a temporary phase of life and have the prospect of getting out of their plight, this is generally no longer the case for older people. When they retire, the chances that older people will improve their financial situation drastically decrease. The problem is compounded by the fact that those affected often do not make use of the social benefits to which they are entitled.

The dramatic development among older people is in stark contrast to development in the other age groups. Because despite Corona, the number of people over-indebted in Germany dropped by one more this year and dropped by 69,000 to 6.85 million. The over-indebtedness rate, that is, the proportion of people over-indebted in relation to all adults in Germany, dropped slightly to 9.87 per cent and thus fell below 10 per cent for the first time in four years.

The figures again reflect the strong state of the labor market until spring 2020. According to experts, this positive trend was reversed by the corona pandemic no later than April. Due to the pandemic, Creditreform expects the situation to deteriorate significantly over the next few years. “The long-term prospects for the development of over-indebtedness are worrisome,” Creditreform expert Patrik-Ludwig Hantzsch said.

Short-term work and rising unemployment figures mean that many consumers in Germany have less money available. Since then, around 700,000 people have lost their jobs, millions have part-time jobs and many self-employed workers struggle for their livelihoods. With a delay, this will lead to an increase in over-indebtedness cases. “For many consumers in Germany, the debt overhang traffic light will turn red in the coming months,” Creditreform experts warned.