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Man using credit card - Source: ONE News -
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The number of baby boomers defaulting on credit has increased, according to credit bureau Veda Advantage.
In the 12 months to September, defaults for those aged 44-62 years rose 19.37% compared with of an overall rise in defaults of 6.48%.
Younger borrowers defaulted less than their older counterparts, with defaults for Generation X - those aged 28-42 - up 3.55%.
The even younger Generation Y - those under 28 years old - showed a 2.27% decline in defaults.
Veda Advantage managing director John Roberts says baby boomers are grappling to service debt built up over the years.
"The recession has seen many Baby Boomers lose their jobs while others have had their wealth eroded," he says.
Despite this, Veda Advantage data showed that more baby boomers sought mortgages with 18.5% more applying for mortgages in the nine months to September compared with the same period last year.
The company says overall mortgage applications were up 12.99% in the nine months - the first increase in applications for the nine-month period since 2005.
Veda says the month of September accounted for the largest number of mortgage applications since September 2005.
Meanwhile, Veda says people are relying less on credit when making big purchases.
Of those people who had made a significant purchase in the last 12 months, over half paid with cash, Eftpos or cheque.
"It is clear the recession has changed the way people think about spending - they are cutting back on their use of credit and they are starting to save for big purchases so they can pay up front," says Edwards.
Edwards says the company is seeing the recession begin to flatten in terms of the credit demand cycle and says it will be interesting to see if this will be reflected in the way people fund their future spending.
