How to help ageing parents with debt
Debt among over-65s is on the rise. It’s a big cause of stress and depression in older people, and can take its toll on many people’s physical health. If your parents are struggling with debt, here are some of the ways in which you can help.
Why older people get into debt
There are lots of different reasons as to why older people get into debt. If they have always lived on a low income and struggled to pay bills, it’s possible that they may be carrying debts from years ago. Alternatively, they may be having to live on a pension that is much less than their income when they were working. Adjusting to this lower income can be difficult and they may have resorted to loans and credit cards.
For others, debt can accumulate once a spouse passes away or leaves, especially if that spouse took care of most of the finances.
Costs such as funeral expenses, care fees, private medical healthcare, high mortgage rates and high life insurance rates are also common in older age and can lead to debt.
Looking out for the signs
Many people hide financial struggles from their children. Because of this, it may not be clear that your parents are in debt. However, there are certain tell-tale signs that you can look out for such as stress and refusal to meet anywhere outside the home. (They may not be able to pay towards a day out or a meal.)
Mounting envelopes of bills that haven’t been read could be a sign that they are struggling to keep up. You may have even noticed your parents selling treasured belongings or they may have asked siblings to borrow money.
How does their debt affect me?
Some people worry that they may inherit their parents’ debt. But unless you’ve taken out a loan on their behalf or co-signed for a loan/contract, this shouldn’t be the case. Debts are usually written off once someone dies.
An exception is if you inherit a property with a mortgage. You will still have to pay the mortgage but shouldn’t have to pay bill arrears.
What you can do to help?
If you decide that help is needed, you should try to approach the subject carefully. Some parents may be reluctant to accept help so that you need to show that you’re on their side. You can offer to pay some of the debts off, but a better option is to help them manage their finances themselves. A few things you can do include:
- Help them create a budget. Go over all their expenses with them and work out where they’re spending too much money. This could be useful for parents that have never had to be financially independent. Make sure they’re getting all the benefits they’re entitled to and that they’re not paying fees for things that they don’t use.
- Explore professional debt management options with them. Nowadays, there are lots of debt management options out there but they can be confusing. For instance, what’s an IVA? And what’s a DRO? Looking up these options online together can help you to both understand them. There may also be debt advisors out there that specialise with senior debt that can recommend the best option of reducing major debt.
- Check that they haven’t been a victim of scams. Finally, it’s worth checking that your parents haven’t been a victim of costly scams. Older people are often preyed upon – especially via email scams and phone call scams. Your parents may know they’ve been scammed but could be hiding it from you, or they may be unaware that they’ve been scammed. In the case of either scenario, it’s worth doing your research.
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