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Polish Retirees’ Debts Continue to Decline, but Average Debt Rises

FINANCEPolish Retirees' Debts Continue to Decline, but Average Debt Rises

The debt of retirees by the end of 2023 amounted to just under 6 billion złotys. Out of the 6.14 million people receiving pensions in Poland, 319,000 are listed in the National Debt Register of the Economic Information Bureau. The average debtor owes around 18.5 thousand złotys. Despite the number of seniors with arrears decreasing year-on-year by 44 thousand, the average indebtedness increased by 1300 złotys.

Pensioners are the only age group whose debt in 2023 has steadily fallen practically throughout the year. At the end of December 2022, it stood at 6.22 billion złotys, and a year later at 5.9 billion złotys. One of the reasons for this situation may lie in benefits which seniors have gained in recent months. The March valorization of pensions was exceptionally high – 14.8%, with a guaranteed increase in the pension benefit of at least 250 złotys, plus 13th and 14th pensions.

“From our experience, whether someone repays debts is not only determined by income level. It’s also a matter of morality and principles. For seniors, debt is a stain on their honor. Therefore, they always try to cooperate with negotiators to pay off arrears. These attitudes are also confirmed in the survey ‘Attitudes of Poles towards Debtors’, which was conducted in November 2023 on the commission of the National Debt Register. Seventy-three percent of seniors believe that people who have money and do not pay their bills do not deserve respect. For comparison, in the case of the youngest Poles, aged 18-24, this percentage was 27%. There is a huge difference,” says Jakub Kostecki, CEO of Kaczmarski Inkasso.

Most of the pensionsers’ debts recorded in the National Debt Register are unpaid banking loans, most of which have already been sold by banks to securitization funds. This amounts to altogether 4.2 billion złotys. Added to this, another 621 million złoty in overdue loans and credits which financial institutions are trying to recover on their own. Another almost 688 million złotys is unregulated alimony, 188 million złoty in housing debts, and 71 million złoty in overdue telephone bills.

“The increasing average amount of debt with a decreasing number of debtors and decreasing debts of seniors indicates that the situation of some of them has worsened. In December 2023, we asked Poles if they had failed to pay a bill in the last 12 months. In the case of people over 60 years old who admitted that this had occurred, they most often pointed to the necessity to cover more urgent expenses (44%) and the increase in the cost of living (41%). It is therefore clear that even relatively large increases in pension benefits do not translate into the ability to pay all bills,” comments Adam Łącki, president of the National Debt Register of the Economic Information Office.

The most indebted seniors live in Upper Silesia. Nearly 49,000 debtors have unpaid obligations totalling 888 million złoty. Second place is occupied by pensioners from the Mazovia province – close to 39,000 debtors owe 885 million złotys. Here, the average debt is also the highest – 22.8 thousand złotys. In no other province did the average retiree’s debt exceed 20 thousand złotys. The third on the list are the Lower Silesians – 31 thousand debtors owe creditors over 555 million złotys.

The smallest total debt is visible in Podlasie. There, almost 5.5 thousand seniors owe 102 million złotys. The second smallest sum to return is in the Świętokrzyskie province, where 77 thousand debtors owe creditors 121.4 million złotys. The third place is occupied by 7.2 thousand Subcarpathian pensioners with a debt of 133 million złotys. The lowest average debt was recorded in Warmia and Mazury – 16.1 thousand złotys.

Out of 318.6 thousand debtors, 171.5 thousand are women. They owe a total of 2.94 billion złotys. The rest, i.e. 2.96 billion złotys, is to be returned by 147.1 thousand men. The average indebtedness of a senior woman is 17.2 thousand złotys and of a senior man 20.08 thousand złotys. The record holder from the Łódź province has arrears to the cooperative bank amounting to 8.7 million złotys.

“Debt can arise from the fact that some seniors do not have savings and in case of a sudden unforeseen situation, they are unable to maintain financial liquidity, resulting in non-payment of current bills. According to the ‘Savings Barometer 2023’ study prepared by IMAS for KRD, one in four people over 60 have no savings. Sixty-eight percent explained this due to insufficient income. Thirty-one percent of respondents who have saved up money indicated that their financial cushion has decreased over the last 12 months,” explains Adam Łącki.

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