Thu 11th Oct, 2007
Debt Hurting the Elderly
Director of Help the Aged in Wales, Ana Palazon, said that those elderly on fixed incomes who have not paid off their home loans will have been hard hit by this year’s rate increases.
“People with sufficient savings will always benefit from high interest rates, but the reality in Wales is that we don’t have older people with massive savings,” she said.
“Most are dependent on state pensions and therefore any increase in interest rates will not be of benefit. And while interest rates have increased we have not seen a proportionate increase in the state pension.”
Principality chief executive Peter Griffiths urged homeowners to seek professional advice and find ways to reduce their monthly commitments to loans.
“We are advising people not to panic but to look at how it will affect their finances. They can seek advice from a mortgage adviser who will help them to consider their options and possibly reduce their mortgage repayments.”
Roger Bootle, an economic adviser to finance experts Deloitte & Touche, said the Bank of England’s Monetary Policy Committee (MPC) was determined to keep inflation low at all costs.
“It might not be too long before the MPC follows up the interest rate rise to 5.75% with another increase.
“And even interest rates of 6% might not be enough to secure the continuation of the UK’s low inflation environment.”
Mr Williams, managing director of North Wales estate agents Williams & Goodwin, said, “It will help continue the stability of the market, which should help first-time buyers. In the scheme of things when you look at interest rates over the last 20 years they are still quite low now.”