That’s the verdict of a report by more2life which has forecast debt levels will tumble across all households. But it expects those aged 55 to 64 to owe £94,173 in 2021 compared to £106,552 in 2019.

Meanwhile, those aged 75 and over, who still hold mortgage debt, will also see the total owed fall from £67,007 in 2019 to £58,975 by 2021.

The report which was carried out by more2life along with consultancy, the Centre for Economics and Business Research (Cebr), forecasts because of coronavirus and the lockdown these older generations are likely to adopt a more cautious approach over the next two years.

They are expected to cut spending on big ticket items such as cars and will delay moving home to avoid unnecessary spending. As a result, the total amount of debt held by the over-55s is forecast to fall from £226bn in 2019 to £211bn this year and then to £207bn in 2021.

Bounce back

But after this time, as the economy recovers consumer appetite for borrowing grows, more2life has forecast a surge in borrowing levels ultimately reaching £300bn by 2030 – this would see debt owed by over 55s increase by half.

And this, said more2life, will be where it will be become vital the older generations get the help they need to understand how housing wealth can support them.

Dave Harris, chief executive officer at more2life, said the coronavirus pandemic was having a huge impact on the way over-55s spent their money – with uncertainty creating caution.

“However,” he added, “although we are expecting to see a short-term fall in borrowing by the over-55s, it is clear that this will not be a lasting trend.

“Almost a third of this demographic will experience a hit on their finances and are expecting their debt to rise as a direct result of the pandemic.

“For those who are impacted financially and need to draw on extra funds, it is crucial that they are made aware of the solutions that can help them bridge this income gap.”

Pension savings fall

There are concerns that as debt falls over the short term, the value of pension savings will also decrease.

Diane Watson, founder of She Can Prosper said this is likely to have a massive effect on their financial wellbeing.

“As debt among older generations rises, it will be vital that they understand how housing equity can help navigate and manage their various financial obligations in retirement,” she said.

“The variety of products now on offer in the later life lending market means that consumers with varying needs are able to find the right option that is suited to their circumstances and ensure that they are able to enjoy a more comfortable retirement.”