More older people have financial debt—but fewer are actually struggling

The Labour Party research is likely to raise concern that many pensioners had been struggling financially before this year’s cost-of-living squeeze struck.

An article in the Express shared analysis from the Labour party about pensioner debt, which is missing some important context—as is a tweet from the shadow Work and Pensions Secretary, Jonathan Ashworth.

The article said that about 550,000 more pensioners in Great Britain had “fallen into debt” between 2010 and 2020. This is technically true. More people over 65 had some kind of non-mortgage debt by 2020 than at the beginning of the 2010s.

However, this on its own doesn’t tell us whether these people were actually “struggling” with that debt or not.

And in fact, the same survey tells us that people over 65 also became less likely to find their debts a problem during this period. Indeed, using Labour’s method, you could even say that slightly fewer pensioners had financial debt that they considered a problem by the end of the 2010s.

How did Labour work this out?

Full Fact asked Labour how it calculated the figures quoted by the Express. It sent us links to population estimates for Great Britain and to Office for National Statistics (ONS) data from the Wealth and Assets Survey, which measures rates of indebtedness over time.

The survey data collected from July 2010 to June 2012 shows that 14% of people 65 or older in Great Britain had some kind of “financial debt”, whereas about 16% did in the data from April 2018 to March 2020.

This 16% of the population in 2020 amounts to about 550,000 more people than 14% in 2010—although this partly reflects the large rise in the over-65 population during this time, from about 10 million to about 12.2 million.

Financial debt means “borrowing such as overdrafts; loans; outstanding balances on credit or store cards; mail order or hire purchase; student loans; or any arrears on credit commitments or household bills” according to the ONS, and does not include mortgages or equity-release loans.

How heavy was the burden?

Having financial debt doesn’t necessarily cause problems. So Labour’s calculation on its own doesn’t tell us whether more people are struggling with their debt or not.

The Wealth and Assets Survey did ask people with financial debt about this, however, to which they were able to say that they found keeping up with payments either “a heavy burden”, “somewhat of a burden” or “not a problem at all”.

The proportion saying that it was a heavy burden fell from 14% in the 2010-12 round of the survey to 8% in the 2018-20 round. During the same period, the proportion saying their debt was somewhat of a problem also fell, from 29% to 22%. As a result, the proportion saying it was not a problem at all rose from 58% to 70%. (It seems that the rounding of these figures to whole percentages means they don’t always add up to exactly 100%.)

Of course the picture may have changed since March 2020, when the most recent data was collected, meaning it will show little if any effect of the pandemic. People can also struggle financially for reasons besides debt. We wrote recently about possible rises in the cost of living, for example.

However, if you apply the percentages of people over 65 who found their financial debt to be any kind of burden to the population of Great Britain in 2010 and 2020, in the way that Labour did, it suggests that despite the large increase in this group, the absolute number who were struggling actually fell slightly, by about 17,000 people.

We asked Labour whether it agreed that the data showed that fewer pensioners were struggling with financial debt, but it declined to comment.

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