Boomers, defaulters and bad debts

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NZ Herald reports

Veda Advantage managing director John Roberts said he had warned a year ago that the “interest-free – two years to pay” type deals would create problems and it appeared that was now the case.

“The statistics show the lifestyles of the baby boomers are coming home to roost – they are defaulting on debts mounted up over the years which they can now no longer service.”

Roberts said many in the baby boomer generation had bought consumer goods on their mortgage and the defaults were likely to be a result of people losing their jobs.

He said that anecdotally he had also heard more baby boomers were affected by redundancies than those in the younger generations.

At the same time people had also seen their personal wealth shrink and those who had higher debt levels were now facing the possibility of having to consolidate debt.

“Their loan-to-value ratio might have been 80 per cent and is now 105 per cent.”

But not all baby boomers were feeling the pain of debt overloading. The baby boomer generation also had the highest increase in mortgage applications so far this year.

Overall applications were up 12.99 per cent but for baby boomers the increase was 18.56 per cent. Read more

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