In follow up to one of our posts in May citing our concern over a recent trend; The Greying of Debtor Nation Equifax Canada reported earlier this week that average debt for consumers aged 65 and over increased by 6.5%, the greatest year-over-year increase in all age groups! Total Canadian consumer debt rose by almost $77-billion, or 6.1 per cent year over year, during the second quarter of 2013.
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“The traditional golden years that retirees anticipated have not become a reality as debt loads rise for those over 65,” said Henrietta Ross, chief executive officer of the Canadian Association of Credit Counselling Services.
“With reduced incomes, often coupled with increased expenses, these individuals are accumulating more debt to boost income through credit so that they can continue to enjoy a pre-retirement lifestyle that they may no longer be able to afford. They also may be accumulating debt in an effort to help their own grown children or their own parents who are struggling financially,” she said.
From our viewpoint the former is likely more responsible than the later. One angle that Ms.Ross fails to consider however is that this is mostly likely just a bi-product of an aging demographic trend; Boomers led the consumer credit explosion that started in the late 80’s – early 90’s during their peak consumption years. Easy credit, like drugs is a hard habit to kick! The cohort mantra of “buy now, pay later” has proven to be an enduring one.