• Among people in problem debt, nearly half report having less than good health (48%) compared to only 22% of those not experiencing problem debt.  
  • People not in problem debt are twice as likely to report having very good health compared to those who are in problem debt (36% compared to 18%).  

This chart shows self-rated health of people in problem debt and not in problem debt for those aged between 16 and 64 in 2016–18. Self-rated health – where people are asked to assess their overall health – is a good proxy for health outcomes generally. An individual is in problem debt if they live in a household which has liquidity problems (those struggling to pay their bills now), solvency problems (those who are at risk of future problems due to their current levels of debt) or both.  

Being in problem debt can harm people’s physical and mental health by acting as a source of strain and stress, reducing income available for health-promoting goods and services or increasing health-harming behaviours such as problem smoking. Poor health can also increase the possibility of problem debt, for example through employment loss or low income. This can create a cycle of problem debt and poor health. 

On average, working age people in problem debt report worse self-rated health than those not in problem debt. 

  • Among those in problem debt, nearly half report having less than good health (48%) and a fifth (20%) report having bad or very bad self-rated health.  
  • Among those not in problem debt, 22% report having less than good health, and only 7% report having bad or very bad health. 
  • People not in problem debt are twice as likely to report having very good health compared to those who are in problem debt (36% compared to 18%).  

This relationship still remains after controlling for age and income, meaning the relationship is not driven simply by those with problem debt having lower incomes or by their age profiles. 

People in problem debt tend to have worse health than people not in problem debt. It is important therefore to acknowledge the role of poor health in triggering and exacerbating debt. Specifically, there are questions on how to ensure debts remain manageable without becoming a problem as well as ensuring debt services are appropriate and accessible for people with health conditions.  

  • A household is defined as being in problem debt if it falls into one of the following two groups:  
  1.  Liquidity problems: 
    a) household debt repayments represent at least 25% of net monthly income and at least one adult in the household reports falling behind with bills or credit commitments, or 
    b) household is currently in two or more consecutive months’ arrears on bills or credit commitments and at least one adult in the household reports falling behind with bills or credit commitments. 
  2. Solvency problems:
    a) household debt represents at least 20% of net annual income and at least one adult considers their debt a heavy burden.   
  • This analysis uses financial debt, which is the money owed on credit cards, loans and other non-mortgage debt but excludes property debt and council tax. 
  • Self-rated health is a measure of health on a five-point scale from ‘very good’ to ‘very bad’. The other options are ‘good’, ‘fair’ and ‘bad’. 

Source: Health Foundation analysis of ONS, Wealth and Assets Survey, 2016-18.

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Debt and health

20 January 2022

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