Debt-free retirement out of reach for many Kiwis

Press Release – Credit Simple

30 May 2017

Debt-free retirement out of reach for many Kiwis

Bankruptcy rates in over 55s on the rise as Kiwis head into retirement with mortgages, personal loans and credit card debt.

New data released today by CreditSimple.co.nz shows Kiwis over 55 are buckling under debt pressure, with the age group making up an increasing percentage of bankruptcies. Over 55s now represent 27.8 per cent of bankruptcies, up from 20.6 per cent in 2010.

The CreditSimple.co.nz figures indicate financially secure retirement is slipping further out of reach for many Kiwis if debt is not well managed in younger years. The data shows 28 percent of mortgages are held by those aged 55 years and older, leaving them 10 years to pay off an average mortgage of $321,000 by age 65.

While some homeowners manage to achieve that, the data shows New Zealanders over 65s hold eight per cent of mortgages, with the average amount owed by this age group sitting at around $232,000. Those 55 and older in Auckland have the most mortgage debt, with the average mortgage sitting at $393,229, while over 55s with a mortgage in Dunedin have an average of $164,701 owing.

New Zealanders are heading into their twilight years with more than just mortgage debt too, with people over 65 responsible for four per cent of personal loans and 16 per cent of credit card debt. Average credit card limits peak in the mid-60s for both men and women, rising from an average limit of $1,756 for 18 year olds to $11,135 for 65s.

CreditSimple.co.nz spokesperson Hazel Phillips said that Kiwis are hanging onto debt for longer and as a result paying more interest over their lifetimes.

“The interest rates you pay on all debt, not just mortgages, play a significant role in how long it takes to pay off debt. With interest rates tipped to rise, it’s more important than ever to use the power of your credit score to negotiate better interest deals,” she said.

Kiwis can check if their credit health is in shape by getting their credit score for free at www.creditsimple.co.nz.

Average NZ mortgage debt*

<55 55+ % of Debt (55+)
Auckland $ 536,776 $ 393,229 22%
Christchurch $ 338,909 $ 221,778 23%
Wellington $ 400,515 $ 285,553 19%
Hamilton $ 353,489 $ 244,440 22%
Manukau $ 480,109 $ 342,015 26%
North Shore $ 542,571 $ 381,504 25%
Waitakere $ 427,460 $ 308,574 25%
Lower Hutt $ 328,039 $ 236,507 21%
Dunedin $ 244,525 $ 164,701 26%
Tauranga $ 338,279 $ 228,475 25%

*The top ten regions with the most mortgages.

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