Enjoying the last years of life with peace of mind, after long decades of work, is an increasingly utopian scenario for many retirees in Portugal. The number of pensioners facing financial difficulties has increased, mainly due to the rise in the cost of living and, in particular, housing prices. The alert is given by Portuguese Association for Consumer Protection (Deco) which received, in the first nine months of the year, 20 thousand requests for help from over-indebted families – of these, 15%, that is, three thousand, correspond to retired people.
To DN, the association states that it has registered a significant increase in requests for support from retirees and the “phenomenon” even led Deco to fine-tune the analysis to the profile of these households in a situation of “high vulnerability”. They are, essentially, elderly people between 70 and 80 years old who reached retirement age without any savings.. Without financial cushions, and with insufficient retirement to cover monthly expenses, debt becomes the only way to survive.
On average, these retirees have four active loans, mainly personal loans, worth 20 thousand euros and credit cards worth six thousand euros. The monthly installments of these credits total around 680 euros compared to an average net income of 1,150 euros, which represents an effort rate close to 60%, “well above the recommended limit of 35%”, warns the association.
Housing expenses are the ones that put the most pressure on the budget. “Many of these credits end up being used to finance the issue of rent and deposits when there is a change of contract, for example, but they are also used to pay current expenses, such as food and healthcare.”, explains to DN the coordinator of Deco’s Financial Protection Office (GAF).
Natália Nunes emphasizes that, in many situations, these elderly people end up having to cut back on food and medicine to pay their housing bills.
More than half (54.1%) of these retirees live in rented houses, 24.6% have their own home without a mortgage, 9.8% still pay mortgage loans and 11.5% live in other housing situations. “These are people who are mostly alone, widowed or separated, and the option is to rent rooms, or to live in shared houses”, he adds.
Natália Nunes highlights a paradigm shift in the requests that knock on the association’s door. “In previous years, we have always had retirees asking for help, largely because of housing credit, mainly because credit was previously allowed beyond the age of 65. When they reached retirement age, people had a drop in income. At the moment, these retired people are asking for help, but it is no longer because of this credit”, he says.
Helping to resolve these cases of over-indebtedness presents added challenges, points out the person responsible, especially with regard to limitations on the renegotiation of credits due to age limits imposed by the bank. Another obstacle is the fact that many support and help channels are concentrated online, a route that is unfamiliar to a large majority of these pensioners.