Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Personal debt: envy, penury or necessity?

20.06.2005


What part does envy play in the apparently spiralling stock of personal debt in the UK, which last year passed the £1 trillion mark? New research by Stephen McKay, published in ESRC’s new report Seven Deadly Sins, indicates that people who are envious of what others have, and dissatisfied with their own incomes, do tend to have higher levels of credit and greater difficulties making repayments. But the size of this effect is small compared with the effects of age, income and changes in circumstances.



Looking at data from the British Household Panel Survey (BHPS), McKay finds that the average adult owes around £4,000. Men and women are almost equally likely to have taken out credit and to have store or credit cards, but men have borrowed rather more money – close to £5,000 on average while women typically owe around £3,000.

Analysis of the BHPS indicates that there is a link between individuals’ satisfaction with their household income and whether they have outstanding credit commitments. One third of people who are ‘completely satisfied’ with their income owe any money, compared with half of those expressing the least satisfaction. Those expressing the least satisfaction with their income are also the most likely to describe their loan repayments as a burden. The higher people’s satisfaction with their income, the less likely they are to believe that their repayments are a burden.


Analysis looking more directly at envy uses data from a study by the Office for National Statistics, in which respondents were asked two specific questions: ‘are you often envious of others?’ and ‘do you feel that others are often envious of you?’ It is possible to look at the association between these views, and whether people have had difficulty paying for credit/bills, and whether they have needed to borrow for day-to-day needs from a range of more informal sources – friends, family, pawnbrokers, moneylenders.

Among a group of people aged 16-59, 13% had experienced arrears in the past year, while 16% had resorted to more informal kinds of borrowing. Among those saying they were often envious of others, 18% had experienced arrears and 23% had used informal borrowing, especially from family.

Without looking at other factors, envy might appear to be increasing the rate of arrears, appreciably so but by less than 50% compared with the population average. This might be an important factor in some borrowing, but other factors seem to play a much larger role in why different groups of people are more likely to have borrowed or experienced arrears.

McKay’s research indicates that families who have experienced a fall in their income in the past 12 months have twice the level of arrears as those whose income has stayed the same or risen.

Among the most important factors in borrowing and in difficulties meeting repayments are age, income and changes in circumstances. For example, McKay’s research finds that arrears are at their highest among families where the heads of household are in their 20s, more than a third of whom are currently in arrears, 22% with bills and 25% with credit commitments. Among those in their 30s, arrears drop to one in five.

The effect of income on problems meeting debt payments is also very strong. Arrears affect one third of people with annual incomes of £7,500-£14,999, dropping to just one in ten of those with annual incomes exceeding £35,000. Clearly, being on a low income is among the strongest influences on having problems repaying debts, and these are magnified by drops in income and other changes in circumstances.

Whatever the ability of most borrowers to repay their debts, there is clearly a group finding it more difficult to pay either credit or bills. 18% of households have arrears in paying bills or credit on time, and this rises to 30% of families with children and half of lone parents. People who say that repayments are a heavy burden tend to be younger than average and more likely to have children (especially lone parents). Those saying that repayments are a burden also appear to owe larger amounts.

Becky Gammon | alfa
Further information:
http://www.esrc.ac.uk

More articles from Social Sciences:

nachricht Sibling differences: Later-borns choose less prestigious programs at university
14.11.2017 | Max-Planck-Institut für demografische Forschung

nachricht Visual intelligence is not the same as IQ
09.11.2017 | Vanderbilt University

All articles from Social Sciences >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Scientists decipher key principle behind reaction of metalloenzymes

So-called pre-distorted states accelerate photochemical reactions too

What enables electrons to be transferred swiftly, for example during photosynthesis? An interdisciplinary team of researchers has worked out the details of how...

Im Focus: The first precise measurement of a single molecule's effective charge

For the first time, scientists have precisely measured the effective electrical charge of a single molecule in solution. This fundamental insight of an SNSF Professor could also pave the way for future medical diagnostics.

Electrical charge is one of the key properties that allows molecules to interact. Life itself depends on this phenomenon: many biological processes involve...

Im Focus: Paradigm shift in Paris: Encouraging an holistic view of laser machining

At the JEC World Composite Show in Paris in March 2018, the Fraunhofer Institute for Laser Technology ILT will be focusing on the latest trends and innovations in laser machining of composites. Among other things, researchers at the booth shared with the Aachen Center for Integrative Lightweight Production (AZL) will demonstrate how lasers can be used for joining, structuring, cutting and drilling composite materials.

No other industry has attracted as much public attention to composite materials as the automotive industry, which along with the aerospace industry is a driver...

Im Focus: Room-temperature multiferroic thin films and their properties

Scientists at Tokyo Institute of Technology (Tokyo Tech) and Tohoku University have developed high-quality GFO epitaxial films and systematically investigated their ferroelectric and ferromagnetic properties. They also demonstrated the room-temperature magnetocapacitance effects of these GFO thin films.

Multiferroic materials show magnetically driven ferroelectricity. They are attracting increasing attention because of their fascinating properties such as...

Im Focus: A thermometer for the oceans

Measurement of noble gases in Antarctic ice cores

The oceans are the largest global heat reservoir. As a result of man-made global warming, the temperature in the global climate system increases; around 90% of...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

10th International Symposium: “Advanced Battery Power – Kraftwerk Batterie” Münster, 10-11 April 2018

08.01.2018 | Event News

See, understand and experience the work of the future

11.12.2017 | Event News

Innovative strategies to tackle parasitic worms

08.12.2017 | Event News

 
Latest News

Polymers Based on Boron?

18.01.2018 | Life Sciences

Bioengineered soft microfibers improve T-cell production

18.01.2018 | Life Sciences

World’s oldest known oxygen oasis discovered

18.01.2018 | Earth Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>