LYING in bed at night 68-year-old Melanie O’Reilly lay awake worrying about how she couldn’t afford to quit her £23,500 a year, 37.5-hour a week job working in a call centre.
She was £13,000 in debt and knew she couldn’t afford to pay the £500 a month repayments to the bank – but she was desperately unhappy in her job.
1
Her days were spent fielding angry calls from Hounslow residents complaining about council tax and housing benefit.
She had moved from South Africa to England in September 2019 with no savings but found a job quickly due to her past career in office furniture sales.
However, the pandemic hit and in October 2020 she was made redundant before struggling to find a job at a call centre in the local council in Hounslow, West London in February 2022.
“I couldn’t stand it anymore. I was sitting there most days in full-blown migraine feeling like I had sandpaper in my eyes, until I couldn’t see the screen anymore,” Melanie, now 69, said.
“I had been very good at my job in South Africa, and I was excellent at sales.”
“Suddenly I was being micromanaged by a 26-year-old, who would count how many times I went to the toilet in a day, and tell me off if I took 31 seconds on a call instead of 30 seconds.
“The staff turnover was ridiculously high and it started to affect my physical and mental health.”
Melanie, who had previously worked as an insurance PA in London before the move to South Africa, was utterly fed up, and knew she had to retire – but had no idea how she could do so with her mounting debt.
She had lent her son and daughter-in-law, who had also moved to the UK, money for a deposit on a home in Colne, Lancashire – but then disaster struck.
Suddenly her daughter-in-law was made redundant shortly after they had their first child, meaning they couldn’t pay Melanie back as quickly as they’d planned.
Melanie was also dealing with the financial fall out of splitting from her partner and she took out a £15,000 personal loan and she had mounting credit card debt of £3,000.
Worryingly one in three people approaching retirement now have debt, with the average over-65 borrower owing £17,000, according to Money Wellness.
Financial anxiety among the 65 to 74 age group has more than doubled since 2021.
“I had the personal loan, but I was not behind in my payments and I just knew, ‘I’ve got to leave. I have to retire.
“If I don’t, I am going to have a breakdown’,” Melanie said.
“I decided to retire and I did, in April 2024. I called up Lloyds Bank and I said, ‘I’ve got this personal loan with you and I know that a few months from now I’m going to end up not being able to pay you.’
“I knew I had to take preventative measures before I got behind in any of my payments.
“I was hugely concerned about how to get Lloyds Bank to agree to a reduced monthly payment.
“I knew I couldn’t pay them back £500 a month, and I knew they wouldn’t negotiate a new loan with me because I was unemployed, as I was now retired with no real income.”
Lloyds put Melanie in touch with Money Wellness, one of the largest providers of debt advice and debt solutions in the UK.
Money Wellness provides free, confidential support to anyone struggling with money or debt, with support available online 24/7 or over the phone, so people can get help in the way that suits them best.
Melanie still owed £13,000 of the £15,000 personal loan. She called Money Wellness, and they asked her to draw up an income and expense statement.
Advisors went through her statement in detail, making allowances for everything from clothing to haircuts, and calculating how much she could afford to pay back each month to help Melanie put a debt management plan in place.
“They were so empathetic and professional,” Melanie explains.
“We revised the budget down to a manageable figure that I could pay Lloyds Bank back and by the end of it, it felt like this was too good to be true.
“They took the burden of negotiations off my shoulders and it was all done seamlessly for me without me having to worry about anything.”
The adviser told Melanie that they would negotiate the figure she had to pay back directly with Lloyds Bank, to the extent of setting up a debit order.
“After the call, I sat back and wept,” Melanie remembers.
“I was hugely concerned because when I was working at the council, I had people calling me up saying, ‘I’ve got the bailiffs at my door. They’re bashing my door down. What do I do?’
“I did not want to be in that position, and I knew that that is a reality that can and does happen.
“I did not want to go anywhere near being that person who’s got the bailiff bashing at your door. That is why I nipped it in the bud before it became a problem.”
From paying £500 a month back, Melanie now pays back £134 a month, with no added interest.
She lives in a HMO in Burnley so she doesn’t pay utility bills or council tax and receives housing benefits and pension credit.
Her repayments come from a small state pension, pension credit and housing benefits.
She receives £456.64 state pension, £451.56 pension credit and £368.20 housing benefit every four weeks.
She’d had to spend her small private pension on replacing her car after a car accident, and buying essentials like furniture.
Money Wellness reviews her plan annually, adjusting the amount if her income changes.
Melanie feels positive about the future and says the debt advice she received from Money Wellness is “the best decision I ever took”.
“For so long, I’d sat with this worrisome burden, thinking ‘I need to retire but I’ve got this debt. What do I do?’ Then these angels from heaven stepped up and helped me,” she adds.
“I feel as though a mountain had been lifted off my shoulders.”
How to cut the cost of your debt
IF you’re in large amounts of debt it can be really worrying. Here are some tips from Citizens Advice on how you can take action.
Check your bank balance on a regular basis – knowing your spending patterns is the first step to managing your money
Work out your budget – by writing down your income and taking away your essential bills such as food and transport
If you have money left over, plan in advance what else you’ll spend or save. If you don’t, look at ways to cut your costs
Pay off more than the minimum – If you’ve got credit card debts aim to pay off more than the minimum amount on your credit card each month to bring down your bill quicker
Pay your most expensive credit card sooner – If you have more than one credit card and can’t pay them off in full each month, prioritise the most expensive card (the one with the highest interest rate)
Prioritise your debts – If you’ve got several debts and you can’t afford to pay them all it’s important to prioritise them
Your rent, mortgage, council tax and energy bills should be paid first because the consequences can be more serious if you don’t pay
Get advice – If you’re struggling to pay your debts month after month it’s important you get advice as soon as possible, before they build up even further
Groups like Citizens Advice and National Debtline can help you prioritise and negotiate with your creditors to offer you more affordable repayment plans.