Pensioner bankruptcy level soaring

The number of pensioners declared bankrupt has soared by 164% during the past five years

The number of pensioners being declared bankrupt has soared by 164% during the past five years, research has shown.

A total of 2,595 people aged over 65 went bankrupt during 2008, up from only 983 in 2004, according to accountancy firm Wilkins Kennedy.

The group, which analysed figures from the Insolvency Service, said bankruptcies among pensioners had risen at more than twice the rate as they had across all age groups, with the total number of people declared bankrupt increasing by 89% during the same period.

It blamed the trend on the increasing number of people who were entering retirement with unpaid debts.

The group said the property boom had seen many people remortgage their homes to unlock equity, but this had left a growing number of pensioners still paying off their mortgage.

Increasing life expectancy has also hit the value of pensions, while record low interest rates and investment volatility has slashed the returns people can earn on their savings.

Pensioners also typically spend a higher proportion of their income than other age groups on essentials such as food and energy bills, the cost of which have soared during the past year.

Anthony Cork, director at Wilkins Kennedy, said: "While the number of personal insolvencies has been climbing relentlessly, the finances of those aged over 65 are deteriorating much faster.

"The property boom saw many people remortgaging their houses to withdraw cash, which has resulted in a growing number of pensioners being left with substantial mortgages.

"Pensioners may have outstanding credit card debts which were taken on during the credit boom, so they find themselves unable to meet repayments when their incomes shrink back on retirement."