1. Main points
In the period July 2016 to December 2016, of all adults in Great Britain questioned, 38% believed employer pension schemes were the safest way to save for retirement; a slight fall from the previous period (40% in July 2014 to June 2016).
49% considered that property would make the most of their money in July 2016 to December 2016, continuing the rising trend of this figure since July 2012.
Of employees asked, 82% said they had previously heard of Automatic Enrolment, whereby all employers must now automatically enrol eligible employees into a workplace pension.
Over half (54%) of adults questioned in July 2016 to December 2016 were confident that their retirement income would give them the standard of living they hope for, a figure that has increased from 41% in July 2012 to June 2014 and 51% in July 2014 to June 2016.
In July 2016 to December 2016, the percentage of adults who were able to keep up with bills and credit commitments without any difficulty increased to 63%, from 59% in July 2014 to June 2016.
The percentage of adults who did not consider their non-mortgage debt to be a problem at all increased from 70% in July 2014 to June 2016 to 73% in July 2016 to December 2016.
Nôl i'r tabl cynnwys2. Things you need to know about this release
The Wealth and Assets Survey (WAS) is a longitudinal survey carried out by the Office for National Statistics (ONS), which aims to address gaps identified in data about the economic well-being of households in Great Britain. It gathers information on, among others: level of assets, savings and debt; saving for retirement; how wealth is distributed among households or individuals; and factors that affect financial planning.
Respondents are questioned every 2 years with each 2-year period forming a “wave”. Wave 1 covered the period July 2006 to June 2008, with subsequent waves carrying on continuously from this date. Wave 6 of the survey covers the period July 2016 to June 2018.
The previous edition of this report, published on 9 March 2017, provided early estimates from the full wave 5 dataset (covering the period July 2014 to June 2016). The time taken to fully process the survey (including editing and imputation of any missing data surrounding components of wealth and income) means the main results from wave 5 will be published around December 2017. This report draws on initial data from the first 6 months of wave 6 (July 2016 to December 2016) and is intended to provide more timely metrics and add value before the main delivery of data.
Early indicators are derived from simple frequency counts of variables included in the questionnaire. They are produced before any imputation is carried out. Imputation is crucial to the estimation of wealth measures, therefore, at present, measures of wealth will not be provided. The questions best suited to be used as early indicators are “opinion” questions or those relating to “ownership” of a particular asset. The set of indicators included in this release is not fixed and will be varied over time, taking into account the views and priorities of main users.
The first of some new questions, introduced in wave 6, concerning peoples awareness of automatic enrolment into workplace pensions, is included in this report (others will be included in later versions of this report). For some other indicators the detail provided in previous reports is unavailable with only 6 months of data, but will appear in later reports as the sample size for the wave 6 component increases.
Unless otherwise stated, questions were asked of all non-proxy eligible adults (those aged 16 or over and not in full-time education who responded in person to the questionnaire).
Full weighting of respondents has been applied to the data in this release to take account of the varying sampling probabilities and attrition between waves. For waves 4 (July 2012 to June 2014) and 5 (July 2014 to June 2016) and 6 (July 2016 to December 2016), the non-proxy respondents have been grossed up to recognised population totals. For wave 3 (July 2010 to June 2012), the weighting grossed all respondents, including proxies, to recognised population totals. While this makes relatively little difference to the percentages in each category, it impacts on the weighted frequencies in the accompanying data tables.
No significance testing has been carried out on these data.
Additional tables and data
The datasets accompanying this release contain some more detailed estimates, including quarterly time series and cumulative data, as well as the weighted frequencies of each of the relevant categories.
Nôl i'r tabl cynnwys3. Attitudes towards saving for retirement
Sources of savings for retirement
There are a variety of ways in which people can save for their retirement including pension schemes, savings accounts, investment in property and other investments. Wealth and Assets Survey respondents aged under 40 or 40 and over and not retired are asked to choose one option from a list of possible options to identify the one they consider to be the safest way to save for retirement (see Annex 1 for full details of the questions and answer options). In a separate question, they are also asked to select from the same list, the one option that they consider will make the most of their money.
Figure 1: Opinions on the safest way to save for retirement, percentage adult population aged under 40 or 40 and over and not retired
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 1: Opinions on the safest way to save for retirement, percentage adult population aged under 40 or 40 and over and not retired
Image .csv .xlsIn the period July 2016 to December 2016, employer pension schemes were considered to be the safest way to save for retirement with 38% identifying this as the safest way, compared with 29% for property, the next most popular option (Figure 1). These have been the top two options since July 2010, though in the latest period the percentage of individuals choosing employer pension schemes as the safest way to save for retirement fell for the first time since July 2010 while the percentage choosing property has remained the same as the previous period. Conversely, the percentage choosing personal pensions as the safest option increased from 11% in July 2014 to June 2016 to 14% in July 2016 to December 2016. Stocks and shares, and premium bonds were considered the safest options by the fewest number of people.
Figure 2: Opinions on which method of saving for retirement makes the most of money, percentage adult population aged under 40 or 40 and over and not retired
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 2: Opinions on which method of saving for retirement makes the most of money, percentage adult population aged under 40 or 40 and over and not retired
Image .csv .xlsWhen considering which method of saving will make the most of an individual’s money, property was the most popular option, chosen by 49% of the population in July 2016 to December 2016, compared with 20% for employer pension schemes (Figure 2), the second most popular option. Since July 2010 and continuing into the latest period of July 2016 to December 2016, the percentage of people identifying property as making the most of their money has been increasing, which may reflect a growing confidence in property prices over this period. In contrast, the popularity of Individual Savings Accounts (ISAs) and savings accounts has been decreasing, possibly reflecting low interest rates over this period affecting people’s attitudes towards these types of investments.
Figure 3: Top five expected sources of income in retirement, percentage non-retired adult population
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 3: Top five expected sources of income in retirement, percentage non-retired adult population
Image .csv .xlsFigure 3 shows the top five expected sources of income in retirement. Respondents who have not yet retired were asked to select all the sources they expect to provide income in their retirement from a list of 15 options. The State Pension has been the top option consistently since July 2010 with a small increase in the number of people giving this as the top option in July 2016 to December 2016 (86%) compared with previous periods (81% or 82%).
The next most popular option was occupational or personal pensions with 68% of respondents in July 2016 to December 2016 giving this option as a source of money for their retirement. The percentage of people giving this as an option also increased in the latest period (from 62% in July 2014 to June 2016). In later editions of this article (when a larger sample size is available), the impact of whether individuals are currently contributing to a pension will be considered.
The next section considers people’s reasons for not contributing to a pension. Respondents aged under 60, not in receipt of a pension and not currently contributing to a pension were asked to select all their reasons from a list of 15 possible reasons for not contributing to a pension. Between July 2016 and December 2016, the most frequently reported reason was “low income or not working or still in education” with 55% of respondents selecting this option (Figure 4). Although this has been the most frequently chosen reason since July 2010, the percentage of people choosing this option has been increasing over the period. It should be noted that individuals in this group are unlikely to be eligible for any automatic enrolment into a workplace pension. As others in the population are automatically enrolled, this group forms a greater proportion of those left not contributing to a pension.
The percentage of people reporting that they “Don’t know enough about pensions” also saw an increase in July 2016 to December 2016 (15%) compared with July 2014 to June 2016 (11%). However, this may also be a reflection of the composition of the group of individuals not contributing to a pension. This will be explored in later editions of this article when a larger sample of data is available for the latest period.
In contrast, in July 2016 to December 2016, the percentage of people reporting that they can’t afford to contribute to a pension (29%) continued the slowly declining trend observed over previous periods.
Figure 4: Top five reasons for not contributing to a pension, percentage adult population aged under 60, not in receipt of a pension and not contributing to a pension
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 4: Top five reasons for not contributing to a pension, percentage adult population aged under 60, not in receipt of a pension and not contributing to a pension
Image .csv .xlsIn 2012, the government introduced major workplace pension reforms, known as automatic enrolment, to encourage more people to save for their retirement. This means that eligible employees are automatically enrolled into an employer pension scheme. The changes in the reported reasons for not contributing to a pension may have been affected by these reforms.
A recent Department for Work and Pensions publication, Automatic Enrolment evaluation report 2016 reports an increase in the number of UK employees participating in a workplace pension between the introduction of the reforms in 2012 and 2015. This means that people were more likely to be contributing to a pension in July 2014 to June 2016 than they were before this. As those who have started a pension between successive periods are then excluded from the data, the composition of the remaining sample changes. As a result, the number who are not eligible for automatic enrolment, due to low income, not being in work or being in education, is likely to increase as a percentage of the lower number not in a pension scheme.
Understanding of pensions
With the introduction of major pension reforms in recent years, the survey collects a number of questions to assess respondents’ level of understanding of pensions and the reforms and to gauge the extent to which external factors influence respondents’ decisions on pensions, savings or investments. These can help determine if the current amount and type of information provided is effective.
In the period July 2016 to June 2018, less than half (42%) of adults aged under 40 or those aged 40 and over and not retired agreed (strongly or tended to agree) that they knew enough about pensions to make decisions about saving for retirement (Figure 5). This is a decrease compared with the previous period, July 2014 to June 2016 (46%) and similar to the first period, July 2010 to June 2012 when 43% were in these categories.
Figure 5: Opinions on whether respondent has sufficient understanding of pensions to make decisions about saving for retirement, percentage adult population aged under 40 or 40 or older and not retired
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 5: Opinions on whether respondent has sufficient understanding of pensions to make decisions about saving for retirement, percentage adult population aged under 40 or 40 or older and not retired
Image .csv .xlsAutomatic enrolment into workplace pensions
In July 2016, a number of new questions were introduced onto the Wealth and Assets Survey on the subject of automatic enrolment into workplace pension schemes. The first of these questions aims to give an indication of the public’s awareness of this policy.
Employees aged 22 or over but under State Pension age, were asked whether they were aware of Automatic Enrolment before the survey. In the period July 2016 to December 2016, of those asked 84% said they were aware of Automatic Enrolment (Figure 6).
Figure 6: Percentage of employees aged over 22 but under State Pension age, aware of Automatic Enrolment into workplace pension schemes, prior to interview, by quarter
Great Britain, July 2016 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 6: Percentage of employees aged over 22 but under State Pension age, aware of Automatic Enrolment into workplace pension schemes, prior to interview, by quarter
Image .csv .xlsFigure 6.1 gives a breakdown by age. Employees under the age of 35 were a little less likely to be aware of Automatic Enrolment (80%) compared with all employees asked (84%) and those aged 55 and above (that is, approaching retirement) were a little more aware of this (86%).
Figure 6.1 Percentage of employees aged over 22 but under State Pension age, aware of Automatic Enrolment into workplace pension schemes, prior to interview, by age band
Great Britain, July 2016 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 6.1 Percentage of employees aged over 22 but under State Pension age, aware of Automatic Enrolment into workplace pension schemes, prior to interview, by age band
Image .csv .xlsFigure 6.2 gives a breakdown by sex, indicating women were a little more likely to be aware of Automatic Enrolment (84%) than men (80%).
Figure 6.2 Percentage of employees aged over 22 but under State Pension age, aware of Automatic Enrolment into workplace pension schemes, prior to interview, by sex
Great Britain, July 2016 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 6.2 Percentage of employees aged over 22 but under State Pension age, aware of Automatic Enrolment into workplace pension schemes, prior to interview, by sex
Image .csv .xlsFigure 7 shows that in July 2016 to December 2016, of adults aged 16, and over 18% reported that their decisions on pensions, savings and investments had been influenced by something in the wider world, increasing from 15% in July 2014 to June 2016. However, as the latest period was just following the Brexit referendum in June 2016, it is likely that this would have influenced many people’s decisions.
Figure 7: Percentage adult population reporting that their decisions on pensions, savings or investments has been influenced by anything in the wider world in the last 12 months.
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 7: Percentage adult population reporting that their decisions on pensions, savings or investments has been influenced by anything in the wider world in the last 12 months.
Image .csv .xlsExpectations of retirement
The Wealth and Assets Survey includes a number of questions relating to expectations of retirement, specifically the expected age of retirement, the expected duration of retirement and the level of confidence in the standard of living that will be afforded by retirement income.
Expected age of retirement
In July 2016 to December 2016, a majority of those currently in work or not retired and intending to work in the future (59%) expected to retire between ages 65 and 69 (Figure 8). This has been the most commonly reported expected age of retirement since July 2010. There was a sharp decline in the percentage of people expecting to retire between 60 and 64 between July 2010 to June 2012 and July 2012 to June 2014, from 27% to 21%, accompanied by increases in percentages expecting to retire in the older age groups. Since then expectations have remained fairly stable.
Figure 8: Expected age of retirement, percentage adult population in work or not retired and intending to work in the future
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 8: Expected age of retirement, percentage adult population in work or not retired and intending to work in the future
Image .csv .xlsExpected duration of retirement
Figure 9: Individuals who have thought about how many years of retirement they might need to fund by current age, percentage adults under 40 or 40 and over and not retired
Great Britain, July 2016 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 9: Individuals who have thought about how many years of retirement they might need to fund by current age, percentage adults under 40 or 40 and over and not retired
Image .csv .xlsIn July 2016 to December 2016, of those aged under 40 or those aged 40 and over and not retired, 32% had thought about how many years of retirement they might need to fund, a small increase from that seen in previous periods (29% in July 2014 to June 2016). As might be expected, the percentage who have thought about this increases as age increases up to age 65 (Figure 9). While only 16% of those aged 16 to 24 reported that they had thought about it, 73% of those aged 55 to 64 reported that they had.
Of respondents who have thought about how many years of retirement they might need to fund, 37% expected to be retired for between 20 and 24 years in July 2016 to December 2016, a percentage that has remained broadly similar since July 2010 (Figure 10).
Figure 10: Expected number of years of retirement, percentage adult population who have thought about how many years of retirement they might need to fund
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 10: Expected number of years of retirement, percentage adult population who have thought about how many years of retirement they might need to fund
Image .csv .xlsStandard of living in retirement
Among men aged under 65 and women aged under 60, in July 2016 to December 2016, confidence that their income in retirement will provide the standard of living that they hope for increased (Figure 11). In this period, 54% reported being fairly or very confident, compared with a figure of 51% in 2014 to 2016.
Figure 11: Level of confidence that retirement income will provide hoped for standard of living, percentage adult population men aged under 65 and women aged under 60 who are not retired
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 11: Level of confidence that retirement income will provide hoped for standard of living, percentage adult population men aged under 65 and women aged under 60 who are not retired
Image .csv .xlsConsidering the level of confidence by sex (Figure 11.1), men were more confident than women. In the period July 2016 to December 2016, of men, 60% were very or fairly confident compared with 49% of women.
Figure 11.1: Level of confidence that retirement income will provide hoped for standard of living by sex, percentage adult population men aged under 65 and women aged under 60 who are not retired
Great Britain, July 2016 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 11.1: Level of confidence that retirement income will provide hoped for standard of living by sex, percentage adult population men aged under 65 and women aged under 60 who are not retired
Image .csv .xls4. Attitudes towards credit commitments
In the period July 2016 to December 2016, of all adults, 63% reported that they were able to keep up with bills and credit commitments without any difficulty, an increase from 59% in July 2014 to June 2016 and 52% in previous periods (Figure 12).
Figure 12: Ability to keep up with bills and credit commitment, percentage adult population
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 12: Ability to keep up with bills and credit commitment, percentage adult population
Image .csv .xls5. Opinions on debt burden
There has been a continued decline in the proportion of adults in debt on bank accounts, credit or store cards, mail order catalogues, hire purchase agreements or loans or those falling behind with bills who feel that their debt is a burden in the period July 2016 to December 2016 (Figure 13). In this period just over a quarter of respondents felt their debt to be a burden, with 7% feeling their debt was a heavy burden and a further 19% feeling it to be somewhat of a burden.
Figure 13: Extent of financial burden of non mortgage debt, percentage adult population with non-mortgage debt or behind with bills
Great Britain, July 2010 to December 2016
Source: Wealth and Assets Survey, Office for National Statistics
Download this chart Figure 13: Extent of financial burden of non mortgage debt, percentage adult population with non-mortgage debt or behind with bills
Image .csv .xls7. Quality and methodology
The Wealth and Assets Survey Quality and Methodology Information document contains important information on:
the strengths and limitations of the data and how it compares with related data
users and uses of the data
how the output was created
the quality of the output including the accuracy of the data
8. Annex – questions and answer options
Table 1: Question name: OSafeRet
Asked of: non-proxy adults aged under 40 or 40 and over and not retired |
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Which of the options on this card do you think would be the safest way to save for retirement? |
CODE ONE ONLY |
1. Paying into an employer pension scheme |
2. Paying into a personal pension scheme |
3. Investing in the stock market by buying stocks or shares |
4. Investing in property |
5. Saving into a high-rate savings account |
6. Saving into an ISA (or other tax-free savings account) |
7. Buying Premium Bonds |
8. Other |
Download this table Table 1: Question name: OSafeRet
.xls (17.9 kB)
Table 2: Question name: OMakeMost1
Asked of: non-proxy adults aged under 40 or 40 and over and not retired |
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And which do you think would make the most of your money? |
CODE ONE ONLY |
1. Paying into an employer pension scheme |
2. Paying into a personal pension scheme |
3. Investing in the stock market by buying stocks or shares |
4. Investing in property |
5. Saving into a high-rate savings account |
6. Saving into an ISA (or other tax-free savings account) |
7. Buying Premium Bonds |
8. Other |
Notes: |
1. The variable OMakeMost was previously named OSafeRe2. The survey question remains the same as only the variable name was changed. |
Download this table Table 2: Question name: OMakeMost^1^
.xls (26.6 kB)
Table 3: Question name: OExpinc
Asked of: non-proxy adults aged under 40 or 40 and over and not retired |
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Which of the options on this card do you expect to use to provide money for your retirement? |
CODE ALL THAT APPLY |
1. State retirement pension, including Second State Pension (S2P, formerly the State Earnings Related Pension Scheme SERPS) |
2. Occupational or personal pension (including one from scheme not yet started) |
3. Savings or investments |
4. Downsizing or moving to a less expensive home |
5. Borrowing against the value of home |
6. Renting out rooms in your house |
7. Selling or renting out another property (other than your main home) |
8. Income from your own or partner’s business or sale of business |
9. Sale of valuables (including art, jewellery, antiques, etc) |
10. Inheritance in the future |
11. Pension or financial support from family or current partner |
12. Pension or financial support from former partner or someone in another household |
13. Earnings from work (including part-time or freelance) |
14. State benefits or tax credits (including Pension Credit) |
15. Other |
16. Don’t know or no opinion |
Download this table Table 3: Question name: OExpinc
.xls (18.9 kB)
Table 4: Question name: Opens
Asked of: non-proxy adults aged under 60 not receiving a pension and not currently contributing to a pension |
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Sometimes people save towards retirement, at different times and in different ways. What are your reasons for not currently contributing towards a pension? |
CODE ALL THAT APPLY |
1. Low income or not working or still in education |
2. Too many other expenses, bills or debts |
3. Can’t afford to (general) |
4. Too early to start a pension |
5. Too late to start a pension |
6. Don't know enough about pensions |
7. Not interested or not thought about it or got around to it |
8. Prefer alternative forms of saving |
9. Not eligible or employer doesn't offer a pension scheme |
10. Employers scheme not attractive or generous |
11. Not staying with employer or looking for a new job or recently changed jobs |
12. Past pension arrangements are adequate |
13. Don't think I will live that long |
14. Do not trust pension companies or schemes |
15. Other |
16. Don't know (SPONTANEOUS ONLY) |
Download this table Table 4: Question name: Opens
.xls (18.9 kB)
Table 5: Question name: OUnder
Asked of: non-proxy adults aged under 40 or 40 and over and not retired |
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I feel I understand enough about pensions to make decisions about saving for retirement. |
1. Strongly agree |
2. Tend to agree |
3. Neither agree nor disagree |
4. Tend to disagree |
5. Strongly disagree |
6. Don’t know or no opinion (SPONTANEOUS ONLY) |
Download this table Table 5: Question name: OUnder
.xls (17.9 kB)
Table 6: Question name: AwareAutoEnrol
Asked of: non-proxy employees aged 22 and not of State Pension age |
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Automatic Enrolment began in 2012 as part of the workplace pension reforms. This means employers will have to enrol all eligible workers into a work pension scheme. Before this survey, were you aware of this? |
1. Yes |
2. No |
Download this table Table 6: Question name: AwareAutoEnrol
.xls (17.4 kB)
Table 7: Question name: OSavExt
Asked of: all non-proxy adults |
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Thinking back over the last 12 months, has anything in the wider world, or outside your household, influenced your decisions on pensions, savings or investments? |
1. Yes |
2. No |
Download this table Table 7: Question name: OSavExt
.xls (17.4 kB)
Table 8: Variable Name: PExpRet
Asked of: adults who are working or not retired and intending to work in the future |
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At what age do you expect to retire (from your main job)? |
ENTER AGE |
Less than 55 |
55 to 59 |
60 to 64 |
65 to 69 |
70 to 74 |
75 or more |
Download this table Table 8: Variable Name: PExpRet
.xls (17.9 kB)
Table 9: Question name: OLong
Asked of: non-proxy adults aged under 40 or 40 and over and not retired |
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Have you ever thought how many years of retirement you might need to fund? |
1. Yes |
2. No |
Download this table Table 9: Question name: OLong
.xls (17.4 kB)
Table 10: Question name: OLongYr
Asked of: all adults who have thought about how many years of retirement they might need to fund. |
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For how many years do you think you will be retired? |
ENTER AGE |
Less than 10 |
10 to 14 |
15 to 19 |
20 to 24 |
25 to 29 |
30 to 34 |
35 or more |
Download this table Table 10: Question name: OLongYr
.xls (17.9 kB)
Table 11: Question name: OStandL
Asked of: non-retired males aged under 65 or non-retired females aged under 60 |
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How confident are you that your income in retirement will give you the standard of living you hope for? |
Would you say you were… |
1. Very confident |
2. Fairly confident |
3. Not very confident, or |
4. Not at all confident? |
Download this table Table 11: Question name: OStandL
.xls (17.9 kB)
Table 12: Question name: Commi
Asked of: all non-proxy adults |
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Which of the following statements best describes how well you are keeping up with your bills and credit commitments at the moment? |
Are you…. |
1. Keeping up with all of them without any difficulties |
2. Keeping up with all of them but it is a struggle from time to time |
3. Keeping up with all of them but it is a constant struggle |
4. Falling behind with some of them |
5. Having real financial problems and have fallen behind with many of them |
6. Don't have any commitments |
Download this table Table 12: Question name: Commi
.xls (17.9 kB)
Table 13: Question name: DBurd
Asked of: all non-proxy adults with debt on bank accounts, credit or store cards, mail order catalogues, any hire purchase agreements or loans or is behind with bills |
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Thinking about the non-mortgage debt you have just told me about, to what extent is keeping up with the repayment of them and any interest payments a financial burden to you? |
1. Heavy burden |
2. Somewhat of a burden |
3. Not a problem at all |