• Half of working age people with poor health have no savings whatsoever, compared to one in three of those with good health.  
  • This relationship holds even after taking into account income. In every income decile, including the top tenth of income (the richest), there is a higher proportion of people with poor health reporting a lack of savings compared to people with good health.  

This chart shows the proportion of individuals with no savings by income decile and self-rated health status in 2016–18. Individuals are grouped into 10 equal-sized bands (deciles) based on their net equivalised household income (adjusted for household size) after housing costs. Self-rated health – where people are asked to assess their overall health – is a good proxy for health outcomes generally. Here, self-rated health has been grouped into ‘good health’: consisting of ‘good’ and ‘very good’ health; and ‘poor health’: consisting of ‘fair’, ‘poor’ and ‘very poor’ health. Respondents are asked how much they have in their savings accounts. 

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, half (51%) of those with poor health have no savings compared to a third (33%) of those with good health. This is partly due to those with poor health being more likely to have a household income towards the bottom of the income distribution, but not exclusively. At every tenth of income, those with good health are more likely to have at least some savings.  
  • In the bottom tenth of income, 75% of those with poor health have no savings compared to 61% of those with good health.  
  • In the top tenth of income, 19% of those with poor health report having no savings compared to 17% of those with good health. 
  • In the bottom tenth of income, the inequality in savings between those with good health and those with poor health is larger than in the top tenth of income.  

There are several potential explanations for this relationship. One is that those with poor health are more likely to be out of work, and consequently have lower incomes. They may also face higher costs as a result of their poor health, such as higher heating bills or home adaption costs, leaving them with less remaining income to save. 

 

Working age people in lower tenths of income are more likely to have no savings whatsoever. Those on low incomes pay extra for essential goods and services because of the poverty premium, which can make it more difficult for them to accumulate savings. Help to Save is a government scheme for people eligible for working tax credits and universal credit. However, the bonuses are not paid until the end of the second year, which may be too long a wait for families experiencing financial difficulties and expensive debt repayments. Instead, a savings scheme should be accompanied by more sustainable and affordable credit.  

  • The income deciles are based on net equivalised household income (adjusted for household size) after housing costs have been deducted from income. Individuals are grouped into 10 equal sized bands (deciles). The first decile represents the lowest 10% of incomes and the tenth decile represents the highest 10% of incomes.  
  • Self-rated health has been grouped into ‘good health’: consisting of ‘good’ and ‘very good’ health; and ‘poor health’: consisting of ‘fair’, ‘poor’ and ‘very poor’ health. 

Source: Health Foundation analysis of ONS, Wealth and Assets Survey Round 6

 

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Debt and health

20 January 2022

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