This article analyses by age two of the current measures of national well-being: ‘satisfaction with income’ and ‘those who are finding their financial situation quite or very difficult’ and their relationship to well-being. There will also be some indication of change in perceived financial situation over time and by other characteristics of individuals. The data used are from Understanding Society, the UK Household Longitudinal Study.
The Office for National Statistics' Measuring National Well-being Programme measures of well-being are organised into ten domains with a total of 40 headline measures.
This article analyses two measures from the Personal Finance domain: ‘Somewhat, mostly or completely satisfied with the income of their household’ and ‘Finding it quite or very difficult to get by financially’ together with contextual information. Analysis is by age group and over time. There is also a discussion of some potential reasons for the observed differences.
More information about all the measures can be found in the ‘National Well-being wheel of measures’ (see section ‘About the ONS Measuring National Well-being Programme’). Throughout this article ‘relatively satisfied’ refers to those who reported being completely, mostly or somewhat satisfied and ‘relatively dissatisfied’ refers to those who reported being completely, mostly or somewhat dissatisfied.
In 2009–10 and 2010–11, 57% of those aged 16 and over in the UK were relatively satisfied with their household income: satisfaction with income varied from about 58% to 66% between 2002 and 2008.
11.5% of people aged 16 and over reported that they were finding their financial situation quite or very difficult in 2010–11 a slight decrease compared to 12.4% in 2009–10.
In 2010–11 about a fifth (19%) of respondents reported that they expected their financial situation to get worse in the next year, while a quarter (25%) expected it to get better.
There was a large increase between 2007 and 2008 in the percentage of respondents expecting their financial situation to get worse as awareness of the potential economic downturn increased.
There was a considerable increase in those reporting their financial situation to be quite or very difficult between 2008 and 2009–10.
In 2010–11 a higher proportion of those aged 60 and over reported that they were relatively satisfied with their household income but a higher percentage also expected their financial situation to get worse next year when compared to those aged less than 60.
In 2010–11 a much lower percentage of those aged 60 and over reported that they were finding their financial situation quite or very difficult when compared to those aged less than 60.
The analysis suggests that some of the changes between the younger age groups and those aged 60 and over may be related to a reduction in financial commitments, including those related to dependent children and household costs, and change from most income from paid employment to income from relatively fixed pensions.
In 2010–11, 57% of those aged 16 and over were relatively satisfied with their household income. In each age group from 16 to 24 to 55 to 59 a lower percentage than the average of those aged 16 and over reported that they were relatively satisfied with their household income. In each age group from 60 to 64 to 80 and over a higher percentage than the average said that they were relatively satisfied with their household income. (Figure 1)
The percentage of respondents who were relatively satisfied with their income has changed a little over time, varying between 58% and 66% between 2001 and 2008. In both 2009–10 and 2010–11, 57% of those aged 16 and over were relatively satisfied with their income (Figure 2).
Satisfaction with income is closely related to satisfaction with life overall. In 2010–11 about 93% of those who were relatively satisfied with their income were also relatively satisfied with their lives overall compared to only 45% of those who were relatively dissatisfied with their income (Figure 3).
In 2010–11, 11.5% of those aged 16 and over reported that they were finding their financial situation quite or very difficult (Figure 4). The percentage finding their financial situation quite or very difficult varied considerably between the age groups. A higher percentage of each age group from 16 to 24 to 55 to 59 reported finding their financial situation quite or very difficult than the average for all aged 16 and over, with noticeably higher proportions of those between the ages of 30 and 54. For those aged 60 and above, a considerably smaller proportion of each age group reported that they were finding their financial situation quite or very difficult. There were differences between men and women in some age groups: a higher proportion of women than men reported difficulties in the 16 to 24, 35 to 39, 40 to 44, 45 to 49 and 65 to 69 age groups while a higher proportion of men than women reported difficulties in the two oldest age groups.
The level at which individuals report their financial situation is closely related to satisfaction with life overall. About 89% of those who reported that they were living comfortably were also relatively satisfied with their lives overall (Figure 5). This compares with a half (50%) of those who reported finding it quite difficult and around a third (34%) who reported finding it very difficult who were relatively satisfied with their lives overall.
Respondents were also asked whether they expected to be better off, about the same or worse off next year. Figure 6 shows the percentage of individuals who reported that they expected to be worse off next year. Overall in 2010–11 nearly 19% of those aged 16 and over reported that they thought they would be worse off next year. This varied by age. The percentage was similar for the youngest two age groups (10%) but increased with age up to the 70 to 74 age group (32%) and then decreased in the two older age groups. There were some differences between men and women particularly for those aged 70 and over where a higher percentage of men reported that they thought they would be worse off next year.
As reported earlier in this article about 19% of respondents reported that they expected their financial situation to get worse next year in 2010–11. However, about 25% reported that they expected it to get better (Figure 7). For each level of reported current financial situation a higher percentage of respondents reported that they expected their financial situation to be better next year than those who reported that they expected their financial situation to get worse in the next year. For example, of those who reported that they were just about getting by, about 2 in every 10 (21%) also reported that they expected their financial situation to get worse next year while 3 in 10 (30%) reported that they expected it to get better.
Between 2001 and 2007 the percentage of those aged 16 and over who reported that they expect their financial situation to be worse in the next year varied between 8.7% (2002) and 10.8% (2005) of respondents (Figure 8). There was a steep increase to 20.5% in 2008, presumably in response to growing awareness of the potential effects of the economic downturn. In 2009–10, 16.8% and in 2010–11, 18.7% of respondents reported that they expect their financial situation to be worse in the next year.
Between 2001 and 2007 the percentage aged 16 and over who reported finding their financial situation quite or very difficult varied between 4.8% (in 2003) and 6.0% (in 2001 and 2007). There was an increase to 7.5% in 2008. Larger percentages of respondents reported finding their financial situation quite or very difficult in 2009–10 (12.4%) and 2010–11 (11.5%) as would be expected during the current economic climate.
|16–59||Over 60||All aged 16 and over|
|Satisfaction with income||Completely, mostly or somewhat satisfied||54||67||57|
|Neither satisfied nor dissatisfied||14||13||14|
|Completely, mostly or somewhat dissatisfied||33||20||29|
|Financial situation now||Living comfortably||23||40||28|
|Just about getting by||29||23||27|
|Finding it quite difficult||10||3||8|
|Finding it very difficult||4||1||4|
|Expectation of financial situation||Better off||33||6||25|
|Worse off than now||16||26||19|
|About the same||52||67||56|
|Number of children responsible for under 18||0||75||100||82|
|1 or more||25||0||18|
|In paid employment||71||17||56|
|Pension from any source||3||89||27|
All three measures analysed above show a change around the age of 60 and this age pattern exists for all the years for which data are available.
After the age of 60 the proportion reporting that they are satisfied with income increases. One reason for lower satisfaction with income in the younger age groups could be greater financial commitments, such as housing costs including mortgage payments. A recent publication by ONS (The Burden of Property Debt in Great Britain, 2006/08 & 2008/10, 13 May 2013) analysed the Wealth and Assets Survey for liabilities related to property debt. Of those who had such debt both the average debt and the proportion of the age group who had property debt decreased with increasing age. Younger individuals are also more likely to be supporting a family: 25% of those aged 59 or younger had responsibility for a child under the age of 18 compared with none of those aged 60 and over (Table 1).
After the age of 60 the proportion reporting that their current household financial situation is being quite or very difficult decreases. The lower percentage after the age of 60 may also relate to the reduction in family and financial commitments. It appears that many individuals in this age group have sufficient income to allow them to meet their financial commitments or have tailored their commitments to allow them to live well. In 2010–11 nearly three quarters of those aged 60 and over reported that they were either living comfortably or doing alright compared with less than three in five of those aged 59 or less (Table 1).After the age of 60 the proportion reporting that that they expect to be worse off in the next year tends to increase. The higher percentage of those 60 and over reporting that they expect their financial situation to get worse in the next year, even for those who are not finding their financial situation quite or very difficult now, may be related to the proportion who have income from pensions or other relatively fixed sources. The expectation may be that there may be rises in the costs of living which overtake any potential rise in their income. Also, many older people use savings interest to supplement their income and as interest rates have remained low the expectation of any rise in this income may be also be low. By contrast those aged less than 60 are more likely to have income from paid employment: 71% of this age group are in paid employment compared to only 17% of those aged 60 and over. While in employment individuals may see the possibility of supplementing or increasing income by pay increases, taking on more hours or finding a better paid job (Table 1).
Understanding Society is a unique and valuable academic study that captures important information every year about the social and economic circumstances and attitudes of people living in 40,000 UK households. It also collects additional health information from around 20,000 of the people who take part.
Information from the longitudinal survey is primarily used by academics, researchers and policy makers in their work, but the findings are of interest to a much wider group of people including those working in the third sector, health practitioners, business, the media and the general public.
40,000 households – 2,640 postcode sectors in England, Scotland and Wales – 2,400 addresses from Northern Ireland.
£48.9 million funding (until 2015).
Approximately 3 billion data points of information.
Innovation Panel of 1,500 respondents.
Participants aged 10 and older.
Building on 18 years of British Household Panel Survey.
35 to 60 minutes: the average time to complete each face to face interview.
Interviews began in 2009 with all eligible members of the selected households.
Adults are interviewed every 12 months either face to face or over the phone using Computer Assisted Interviewing.
10 to 15 year olds fill in a paper self-completion questionnaire.
From 2010 some 20,000 participants aged over 16 also received nurse visits and provided a blood sample and some basic physical measurements (height, weight, blood pressure, grip strength).
The data in this analysis is mainly from the adult self completion questionnaire of Wave 2 of the Survey and has been weighted using the interview with self completion individual cross-sectional weight (a_indscus_xw). Throughout this article relatively satisfied refers to those who report being completely, mostly or somewhat satisfied and relatively dissatisfied refers to those who report being completely, mostly or somewhat dissatisfied.
This article is published as part of the ONS Measuring National Well-being Programme.
The programme aims to produce accepted and trusted measures of the well-being of the nation - how the UK as a whole is doing.
Measuring National Well-being is about looking at 'GDP and beyond'. It includes headline indicators in areas such as health, relationships, job satisfaction, economic security, education, environmental conditions and measures of 'subjective well-being' (individuals' assessment of their own well-being).
Find out more on the Measuring National Well-being website pages.
Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: email@example.com
ONS (2012) National Well-being interactive wheel of measures. Accessed at National Well-being interactive wheel of measures [Adobe Flash]
University of Essex. Institute for Social and Economic Research and National Centre for Social Research, Understanding Society: Wave 1-2, 2009-2011[computer file]. 4th Edition. Colchester, Essex: UK Data Archive [distributor], December 2012. SN: 6614, http://dx.doi.org/10.5255/UKDA-SN-6614-4.