Senior Consumer Debt Annual Report for 2021

70% of Older Americans Report Having Debt in 2021 (Down from 79% in 2020)

· Published: February 19, 2021

Many aspects of the American economy remain in a precarious position because of the pandemic; unemployment is still at levels far higher than before the crisis, tens of thousands of businesses have shut their doors permanently, and an eviction crisis looms. 

A year into the crisis, few Americans have been untouched by the crisis. A couple of months into the pandemic, we surveyed older Americans about how the pandemic had affected their finances, including whether they’d needed to take on more debt and what they expected for their personal financial future over the course of the crisis.

Eight months later, we’re revisiting this issue and expanding the scope to include adults of all ages. Our first survey on debt and the finances of older adults during the pandemic was conducted in May 2020. At the time, we found that almost 80 percent of seniors had debt of one form or another but that more than half didn’t expect the COVID-19 pandemic to cause them to increase their debt.

Early in 2021, how are those predictions holding up, has the financial picture for older Americans changed, and how do consumers compare across generational lines? To understand those issues and more, we asked more than 1,000 adults about a range of topics related to credit cards, home and auto loans, and the impact the pandemic has had on their finances.

Read on for the complete results of the study; here is a peek at the highlights of our findings:

  • About 70 percent of older Americans have some type of debt, whether credit card, mortgage, medical, or something else; that’s down from 79 percent in 2020.
  • Credit card debt was more common for older adults than mortgage debt, but their numbers are similar (43 percent vs. 38 percent).
  • Older adults were the most likely age group to say the pandemic hadn’t changed their financial status in 2021; 65 percent said their financial picture is unchanged.

Older Americans & Debt

In the first installment of this survey, about 79 percent of seniors said they had debt, whether a mortgage, credit cards, auto loans, medical debt, or something else. In the most recent installment, that number fell to 70 percent. This finding tracks with a general decline in household debt, including the largest drop in credit card balances since 2000.

Credit card debt remained the most common type of debt for older adults from the four major types of debt, but none of the four broke the 50 percent mark for seniors.

Percentage of seniors with debt by type

Auto

25%

Credit card

43%

Medical

13%

Mortgage

38%

Apart from medical debt, which remained at its 2020 level, older adults were less likely in 2021 than last year to report having most types of consumer debt.

Percentage point change in seniors with debt by type, 2020-2021

Credit card

-9

Mortgage

-3

Auto

-9

Medical

0

Adults between 45 and 60 tend to have higher rates of debt than their younger counterparts, with 52 percent saying they have credit card debt and an identical percentage indicating they have mortgage debt. They also were the group most likely to report having an auto loan or lease, but those between 30 and 44 were most likely to report having medical debt.

Percentage with debt by type and age group

Type

18-29

30-44

45-60

60+

Auto

23%

29%

37%

25%

Credit card

30%

43%

52%

43%

Medical

15%

27%

19%

13%

Mortgage

19%

38%

52%

38%

Younger adults were far more likely than any other age group to have types of debt other than auto, credit cards, medical, and mortgage. This category includes things like education debt, so the fact that about one in four people between 18 and 29 have more than $10,000 of debt in the “other” category perhaps should come as no surprise.

Only about 22 percent of older adults reported having any debt in this category, but it was considerably more common among all other age groups, and about 20 percent of people between 30 and 60 have at least $10,000 in this type of debt.

All older adults and those drawing Social Security or pension income tended to report having debt at similar rates. The biggest difference was for those on pensions; only nine percent of them have medical debt compared to 13 percent of all people in the age group.

Debt Loads & Payment Habits

In addition to most debt types becoming less common for seniors over the past year, those who do carry debt were more likely than last year to have low balances.

Last year, about one in five seniors had credit card debt loads over $10,000; that’s only 13 percent today. And in 2020, more than half of seniors with medical debt had a low balance (under $1,000). That’s become slightly more common, with 57 percent of seniors who have medical debt owing less than $1,000 total. A similar shift took place in the “other” debt category, with low balances rising and high balances falling.

Seniors’ debt load level by type, 2020-2021

Level

Credit card 2020

Credit card 2021

Medical 2020

Medical 2021

Other 2020

Other 2021

<$1,000

28%

35%

52%

57%

17%

23%

$1,000-$2,500

19%

19%

19%

27%

12%

15%

$2,500-$5,000

17%

21%

12%

9%

12%

12%

$5,000-$10,000

16%

13%

11%

3%

18%

14%

$10,000+

20%

13%

6%

4%

41%

35%

Note: Among those who reported having debt type

Older adults were more likely than other age groups to have multiple credit cards, and they had by far the lowest rate of non-credit card ownership; only eight percent of people over 60 don’t have any credit cards. For seniors, that was similar to last year’s figure of seven percent.

Number of credit cards owned by age

Cards

18-29

30-44

45-60

60+

0

30%

21%

13%

8%

1

38%

27%

20%

21%

2+

32%

52%

66%

71%

Compared to last year, older Americans with credit cards were slightly more likely to pay them off each month. In 2020, about 62 percent of seniors with at least one credit card said they paid their credit card bills in full each month; this time around, that number was 67 percent. 

Seniors’ monthly credit card balance habits, 2020 vs. 2021

Habit

2020

2021

Pay balance in full

62%

67%

Pay more than minimum but less than balance

31%

28%

Make minimum payment

3%

2%

Pay less than minimum

1%

1%

No payment due

2%

2%

Note: Among those with at least one credit card

Older Americans are also the most likely age group not to carry high balances month to month, with a combined 95 percent paying the full balance or more than the minimum on a monthly basis. Those between 45 and 60 weren’t far behind on that score, though, with a combined 91 percent of them paying off or paying down their balances each month.

Monthly credit card balance habits by age

Habit

18-29

30-44

45-60

60+

Pay balance in full

65%

56%

57%

67%

Pay more than minimum but less than balance

23%

32%

34%

28%

Make minimum payment

2%

7%

7%

2%

Pay less than minimum

1%

2%

66%

1%

No payment due

8%

3%

1%

2%

COVID-19 Impact

Older adults appear to have adjusted better than other age groups to the economic toll of the pandemic. Last year, about 31 percent of seniors said the economic situation around the pandemic had changed their financial status, but this year, that figure was 23 percent. About two-thirds of seniors said their current financial status is unchanged because of the economic toll of the pandemic, and these rates held up for all older adults regardless of whether they’re working or collecting retirement income.

Those between 30 and 44 were the most likely to say the economic toll of the pandemic had struck their pocketbooks as well. Those between 30 and 60 were more likely than members of the other two age groups to have taken on more debt during the economic crisis.

COVID-19 changes by age group

Change

18-29

30-44

45-60

60+

Financial picture changed

39%

40%

38%

23%

Financial picture unchanged

46%

49%

53%

65%

Too soon to tell whether financial picture will change

15%

11%

9%

12%

Taken on more debt

13%

18%

20%

10%

Shed debt

13%

12%

10%

10%

Debt status unchanged

75%

70%

69%

80%

Looking in more detail at the economic impact of the pandemic in people’s lives, older Americans were, not surprisingly, the group least affected by job loss or reduced pay, but about 11 percent said they’d dealt with medical bills not related to the pandemic that had negatively affected their finances.

Among positive economic effects during the pandemic, all age groups were most enthusiastic about stimulus payments, and about one in five seniors said saving money by not being able to travel or do other expensive leisure activities was another positive side to the pandemic crisis. Overall, negative effects were most common for those between 18 and 29, with nearly one-quarter of the age group reporting a job loss.

Negative/positive economic impact of pandemic by age group

Impact

18-29

30-44

45-60

60+

Job loss

24%

14%

12%

6%

Job furlough

11%

9%

11%

3%

Reduced pay

13%

19%

11%

8%

Housing expenses

16%

15%

12%

8%

Medical expenses not related to COVID-19

13%

10%

14%

11%

Medical expenses related to COVID-19

2%

3%

3%

2%

New job

18%

10%

6%

2%

Stimulus payments

44%

52%

47%

47%

Job promotion

8%

5%

15%

1%

Increased pay

18%

14%

17%

5%

Gig work (Uber, Postmates, Instacart, etc.)

4%

1%

8%

1%

Other side hustles

9%

14%

7%

3%

Limited access to expensive activities (travel, dining, entertainment, etc.)

22%

23%

32%

18%

Freezes in rent increases

1%

5%

2%

1%

Loan relief/forgiveness

11%

9%

6%

2%

Older adults are less likely than last year to indicate they expect the pandemic to lead them to assume more debt than before. In the first installment of the survey, about 12 percent of seniors said they thought the economic toll of the pandemic would lead them to increase their debt load, while in the most recent installment, that number was only five percent, which is the lowest rate of any age group. 

Debt status prediction by age group

Debt status prediction

18-29

30-44

45-60

60+

Expect to take on more

8%

13%

12%

5%

Expect to take on less

11%

14%

14%

14%

Don't expect changes

38%

44%

48%

52%

Unsure

43%

30%

26%

30%

Uncertainty remains high for all age groups, with about 30 percent of seniors saying they’re unsure about the pandemic’s impact on their need to take on more debt; this is an increase from 25 percent in 2020. 

Conclusion

Almost a year into the pandemic, older Americans have fared better than their younger counterparts when it comes to the economic impact of unemployment, lockdowns, and business closures. Given that the nation is still in the early stages of rolling out vaccine campaigns, it should come as no surprise that Americans of all age groups seem unsure what their financial future holds.

Methodology

Our survey of 1,062 U.S. adults was conducted online in February 2021.