Worrying rise in debt levels among retirees

Retirees now carry significantly higher debt burdens

- MARTIN HESSE

TWO recent credit-related surveys point to increasing debt among older South Africans, which is worrying, because ideally, your debt levels should start decreasing once you get past middle age.

Older people have health-related expenses that younger people don't generally have, and, once they retire, need to ensure that their pension income can sustain them for the rest of their lives. They don't have the luxury of expected pay rises or promotions. A weighty debt burden is the last thing they need.

The DebtBusters Debt Index for the 4th quarter of 2025, released last month, shows that:

• Of South Africans entering debt counselling, the average debt to annual net income ratio of people aged between 45 and 54 years was 134%. For people aged 55 years and over, it was 151%. Put another way, it means that, with a debt-to-annual-net-income ratio of 151%, the total debt you owe equals roughly one-and-a-half times your net annual income. Compare this with an average ratio of 69% for people in their late 20s and 89% for people in their early 30s.

Just under a third (31%) of applicants in the 4th quarter of last year were 45 or older. This is up from 20% in 2016, the first year of the DebtBusters survey.

The Eighty20 Credit Stress Report for the same period also reveals worrying debt patterns among older consumers, and it highlights two concerns: a sustained rise in the number of defaulters, and a steady accumulation of overdue balances, "both of which appear to be accelerating rather than stabilising", the report says.