Quarter of middle-aged consumers say debts have increased

New research from Aviva has revealed that a quarter (25%) of middle-aged (45-54-year-olds) consumers (equivalent to 2.25 million people) say their total debts have increased in the 12 months to April 2021.  This is despite headline figures claiming that consumers have saved more than £180 billion during the Covid-19 pandemic.

One in five (18%) of 45-54-year-olds whose current debt has increased over the past 12 months have borrowed to pay off other existing debt or to help a family member, and a similar number took a credit card/mortgage repayment holiday and interest has accrued (19%).

The majority (78%) of 45-54-year-olds surveyed worry about the level of debt they have accrued, with 21% saying they worry about it ‘often’ (14%) or ‘all the time’ (8%). While the largest proportion (26%) of this group speak to their partner/ spouse about their money worries, an alarming number (24%) do not talk to anyone at all.

A quarter (24%) of this population do not know how much debt they have and worryingly, over a third (34%) have debts they do not know how to pay off.  One in five of them (18%) feels their debt is ‘out of control’ when it comes to paying off the debt they have built up during the pandemic.

The 45-54-year-olds remain the most worried about their finances with a fifth of those with money worries admitting to thinking about money worries every day.

When asked why they feel their debts are out of control, the 45-54-year-olds say it is mainly down to reduced income or benefits, but almost a quarter (23%) put it down to poor financial skills and one in five (18%) say there is ‘no main reason why their debt is out of control, it just is’ 

Alistair McQueen, Head of Savings and Retirement at Aviva said “Those in mid-life represent the least happy and most anxious age group in the UK – balancing their own needs with younger and older members of their family, and we know that when people feel their debt is out of control it causes huge anxiety. What’s important to remember is that there is a range of completely free, confidential and impartial services available to help you if debt is becoming a problem. ”

Methods used to reduce debt:

Despite an increase in their debt levels during 2020, the 45-54-year-olds did more than any other age group to resolve their money problems:

• Almost a third (31%) cut back on non-essentials like luxury goods, holidays, entertainment ( vs 26% national average)
• A quarter (25%) cut back spending on food and non-alcoholic drinks (vs 18% national average)
• One in six (17%) sold possessions (vs 12% national average)
• More than one in ten (12%) got a second job or worked overtime
• A similar number (12%) bought a lottery ticket, despite the odds of winning the jackpot being one in 45 million. This method is most used amongst the 35-44 year olds (18%).
• Other strategies employed include 11% consolidating debts in one place to reduce monthly payment, 8% taking advice from debt helplines/service and 6% used financial planning/ debt management apps or online tools.