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Mental well-being and financial management in older people

Author: David Hayes
Institution: University of Bristol
Type of case study: Research

About the research

As a growing part of the population, older people are increasingly important to the UK economy: it has been estimated that people over age 65 spend more than £100 billion per year, which accounts for around 15 per cent of all household expenditure. At the same time, older people are experiencing more pressures on their often limited financial resources, which can reduce their quality of life. It is crucially important, therefore, that policymakers and practitioners have a good understanding of the different aspects of well-being among older people, in order to inform the policies and services that affect their lives.

At present, we do not have a complete picture of the financial dimensions of well-being among older people in the UK. This research improves our understanding of these issues by examining the types of savings and assets that older people have; their patterns of spending and borrowing; their access and use of financial services such as bank accounts and insurance; and the relationship between financial well-being and quality of life.

To assess the relationship between financial status and mental well-being, the researchers conducted secondary analysis of the 2011 third wave of Understanding Society, the largest social survey ever undertaken in the United Kingdom, and the Living Costs and Food Survey.

Based on the responses of the General Health Questionnaire (GHQ), a mental health measurement that was used in the 2011 Understanding Society study, the researchers found that those who report the highest scores are older women and those who are divorced or separated, have a mortgage, live in the Northwest, are unemployed or have a long-term sickness or disability and find it ‘very difficult’ to manage. Based on these findings, the researchers conclude that financial problems may exacerbate poor mental health.


In this study, researchers used cluster analysis and CHAID analysis to produce a segmentation of older consumers from the Living Costs and Food Survey. Logistic regression was used to examine the relationship between mental well-being and financial management among those over 50, using data from Understanding Society, Wave 3.


Hayes, D. and Finney, A. (2014) ‘Dominant patterns of expenditure among older people in the United Kingdom: Segmenting the older consumer using the Living Costs and Food Survey’, Journal of Population Ageing, 7(2), 97-113 doi: 10.1007/s12062-014-9097-4

Hayes, D. (2014) Financial wellbeing in later life: Evidence and policy, University of Bristol, Personal Finance Research Centre, March 2014. Retrieved 19 June 2014 from

Hayes, D. (2014) The relationship between mental wellbeing and financial management among older people: An analysis using the third wave of Understanding Society, International Longevity Centre-UK, January 2014. Retrieved 19 June 2014 from

This study also received coverage in the media:

Johnston, I. (2014) ‘Debt-ridden over-50s “more likely to suffer mental-health problems”’, The Independent, 27 January 2014. Retrieved 19 June 2014 from

O’Hara, M. (2014) ‘Mental wellbeing should be tackled before it leads to a need for crisis care’, The Guardian, 4 February 2014. Retrieved 19 June 2014 from

In addition, this study is featured in the Understanding Society podcast series.