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Debts of seniors are increasing at a faster rate than in other age groups

FINANCEDebts of seniors are increasing at a faster rate than in other age groups

Seniors’ debt increased by nearly one billion zlotys to 11.6 billion zlotys in the last year, making it the fastest-growing debt group after 18-25 year olds and 45-54 year olds, according to data from the Debtors Register BIG InfoMonitor and credit information database (BIK). The debt of a 67-year-old from Lublin increased by almost 8 million zlotys, reaching over 88 million zlotys.

The second year of significant inflation and high living costs has been tougher for seniors than the first, especially for those already struggling financially. – While in the period from November 2021 to November 2022, seniors’ arrears increased by 0.43 billion zlotys, and the number of debtors increased by almost 4 thousand to 387 thousand, a year later this change was more than twice as high. Seniors’ bank accounts saw the addition of 0.96 billion zlotys of new unpaid on-time current obligations and loan installments. At the end of last November, these exceeded 11.6 billion zlotys, and the debt was in the hands of 395 thousand people – says Slawomir Grzelczak, President of BIG InfoMonitor.

After an increase of 8 thousand delinquent debtors aged 65+, the share of those struggling with financial problems in this age group still does not exceed 6 percent, while in the entire adult society it is approx. 9 percent.

– When it comes to the percentage of unreliable payers, seniors are still more solid than people aged 25 to 64. At the same time, although this happens slowly, the share of those struggling with payments of current bills and loan installments is steadily going up in this age group. This is the case when in the entire society it has been fluctuating between 8.5 and 9 percent for the past 6 years. – notes Slawomir Grzelczak.

The average amount of overdue obligations of the elderly is now 29.4 thousand zlotys, compared to 27.5 thousand zlotys a year ago. Among all unreliable debtors visible in the BIG InfoMonitor register and BIK database, it currently exceeds 34.4 thousand zlotys. The least, young people have an arrears of 8 thousand zlotys.

Aches and Pains – High Inflation, Low Income and Healthcare Costs

The year 2023 brought noticeable changes in the structure of seniors’ expenditures as a result of a study “Household Budgets of Poles” conducted for BIG InfoMonitor. 1/3 of the 65+ group stated that they often had to keep their expenses to a minimum, and every fourth person postponed larger purchases, even when they were needed or waited for discounts or sales. The main causes of seniors’ troubles were high inflation (45 percent), too low income (11 percent), the cost of healthcare (11 percent) and the need to help their family (7 percent). The situation forced every third senior to use their savings. The majority (16 percent) needed them to pay for medical services, such as private doctor visits or rehabilitation. Every tenth senior depleted savings to pay for medicine or fuel for the winter. People aged 65+ also added savings to pay for regular expenses, and even food (8 percent each).

The research results shed some light on the difficult financial reality, which Poles are struggling with in the conditions of prolonged high inflation. In this context, the seniors’ answers do not look bad at all, because firstly, three out of four seniors have savings for more than a month, and other age groups do not match them in this respect. Secondly, every third person aged 65+ used savings to finance basic needs, while in other cases it was almost half. – Owned savings, as well as greater discipline and years of practice in managing household budget and spending restrictions that more experienced people impose on themselves, mean that there are fewer seniors in financial trouble than in other age groups. The higher payment morality of the older generation also matters – says Slawomir Grzelczak.

The most debt-ridden are in Kujawy, the least in Podkarpacie

The situation across Poland is not uniform. The highest percentage of delinquent debtors aged 65+ can be observed in the Kujawsko-Pomorskie region. Their overdue debt per person is lower than the average for the country, reaching 23,354 zlotys. The Debtors Registry BIG InfoMonitor and BIK lists 26,522 seniors with financial problems, accounting for 7% of people aged 65+ living in the Kujawsko-Pomorskie region. A slightly lower percentage of debtors can be found in the senior populations of Dolnośląskie and Zachodniopomorskie regions. On the other hand, the Podkarpackie region has the lowest percentage of seniors struggling with debt, with less than 3%, and Podlaskie, with a share of unreliable debtors at 3.4%.

However, the most indebted region is Mazowieckie. Each of the 51,632 unreliable debtors (5.1% of the total) here owes nearly 45,000 zlotys in debt. This amount is relatively small compared to the debts of the record holders.

The No. 1 debtor, both among seniors and all debtors, is a 67-year-old man from the Lubelskie region. His outstanding debt in the Debt Registry BIG InfoMonitor and BIK is close to 88.2 million zlotys, which increased by 7.6 million zlotys compared to the previous year. The woman with the highest debt is a resident of Silesia with overdue obligations amounting to 52.6 million zlotys. The third-place debtor in the country is a 66-year-old resident of Mazovia with an overdue debt of 32.3 million zlotys. Half of the top ten debtors with the highest arrears in Poland are seniors.

In total, 782 seniors have debts amounting to at least 1 million zlotys, and 291 of them are from Mazovia. The Zachodniopomorskie region also has a large number of debtors with at least one million zlotys in debt.

Not worth paying for absentmindedness

Every tenth debtor aged 65+ owes no more than 500 zlotys, and another 9% owes between 500 and 1000 zlotys. This means that with a bit of luck, help from loved ones, or an agreement with the creditor, more than 74,000 seniors could get rid of their debts and sleep peacefully. However, it is crucial to be aware of one’s overdue debt. Regardless of age, it is advisable to check one’s status in the BIG InfoMonitor debt register regularly. By registering on the website, a free report can be downloaded every six months. Checking one’s financial status can also be a thoughtful gesture on Grandparents’ Day or Fathers’ Day. As we know, remembering all the bills and invoices to be paid can be challenging, especially for older adults. It would be unfortunate if a brief lapse in memory later affected one’s financial credibility. Being listed in the BIG registry can lead to difficulties in making installment purchases, subscribing to services, or obtaining a loan or credit.

The study “Savings, financial problems, and debts of Poles” was conducted by Quality Watch for BIG InfoMonitor using the CAWI method on a sample of 1,088 adult Poles from September 29 to October 2, 2023.

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