Yahoo Finance Seniors struggling to keep up with debt as delinquencies rise
Consumer delinquencies among Canadians are on the rise, but what’s most troubling is that delinquencies among seniors are rising the most.
Overall, among all age groups, the 90-day mortgage delinquency rate rose by 1.5 per cent and the non-mortgage rate was up 0.4 per cent.
“While the 90-day-plus delinquency rate was up marginally from a year ago, seniors (65 and over) have now reported three straight quarters of rising delinquency,” said Equifax in a report.
“In Q4, the delinquency rate for seniors was up by 7.2 per cent and the increases are gaining momentum.”
Debt among seniors grew 2.9 per cent to an average of $16,162.
The Canadian Association for Retired Persons (CARP) is concerned about the trend and sees a number of contributing factors.
“More Canadians are retiring with debt and seniors are taking on debt to help out adult children or grandchildren,” Wanda Morris, CARP’s Chief Advocacy and Engagement Officer, told Yahoo Finance Canada.
“The disappearance of defined benefit pension plans (and cuts in pensions from others) is shifting the burden of financial security, and thus the risk of bankruptcy, to individuals who are often not prepared for the challenge.”
Morris says seniors are especially vulnerable after a divorce, the death of a partner or spouse, illness, the cost of home care, or financial elder abuse. She says there are other signs of financial distress among the elderly.
“Food banks have noted increases in use by older Canadians and homelessness among seniors is a particular issue in B.C.,” said Morris.
Bank loans are the biggest source of credit growth among all age groups — rising 6.5 per cent in the fourth quarter to $27,667. Credit card balances were up 2.4 per cent to $3,904. Car loans were up 1 per cent as more people choose to lease.
Canadians aged 45-55 carry the most debt ($35,566) but delinquencies are among the lowest at 1 per cent. Only those aged 18-25 have a lower delinquency rate and also carry the least debt ($8,777).
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