Older people are being hardest hit by the long period of record low interest rates, with four times as many becoming insolvent than the average.
Shock new figures published today reveal that twice as many pensioners went bust last year compared with five years earlier. Over the same time period, the insolvency rate in age groups under 35 fell. Meanwhile, recent research by the debt charity Consumer Credit Counselling Service found that the number of pensioners with unmanageable debt doubled in the past five years.
"Pensioners have been caught in a vice between high inflation and the Bank of England's low interest rates," said Keith Stevens, a partner at Wilkins Kennedy, which examined the official insolvency figures. "Low interest rates and quantitative easing have eaten away at pensioners' sources of income, while persistently high inflation has really hurt pensioners on fixed incomes."
Some 5,749 pensioners became insolvent last year, more than double the 2,725 who became insolvent in 2006.
However most of the surge happened from 2009 onwards. In 2008 pensioner insolvencies were just a fifth higher than the 2006 figure. But by 2011, pensioner insolvencies were three-quarters higher than in 2008.
Mr Stevens said: "Traditional investment vehicles are offering almost no return, especially once you take inflation into account. Today's pensioners haven't had the cushion that previous generations of pensioners had."Reuse content